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Regulation and compliance is a growing concern for companies throughout the mortgage industry. For the reverse mortgage industry, lenders are under the microscope for false, misleading or deceptive advertising. The Texas House Bill 1129 is looking to protect reverse mortgage borrowers against the aforementioned dangers.
“It basically aims to define the parameters of what qualifies as deceptive advertising, while also listing that a piece of material found to be in violation of the proposed law would constitute a violation of Texas’ Business & Commerce Code as a deceptive trade practice,” according to a report from Reverse Mortgage Daily.
According to the report, the National Reverse Mortgage Lenders Association's State and Local Committee is jumping in, reviewing this particular piece of state legislation among others, to look at the impact that these legislations may have on reverse mortgage lending.
“The problem with this legislation, frankly, is that it was too open-ended, and it really [did not] have a start time or a stop time,” said Scott Norman, NRMLA co-chair and Finance of America Reverse vice president of field retail and director of government relations, at the NRMLA Virtual Policy Conference, according to RMD. “And theoretically, [a borrower] could – 10 years from now – come back and say, ‘so and so said something to me that I think was somewhat confusing, and I feel like I’ve been harmed.’ And so, what we are working on [is putting] together an amendment to House Bill 1129 to narrow the scope of what they’re trying to do.”
“[Such practices are] how we get into legislation like this that is certainly well-intentioned, but we need to work within not only what the federal guidelines allow – and certainly NRMLA has got a lot of guidelines that they like to work with – so we’re really trying to narrow this down,” added Norman, according to the report. “We don’t have a problem with the idea of a consumer protection bill, we have a problem with the idea that it’s so completely open-ended, that anybody can say anything, and anybody can cry wolf at any given time, even 5-10 years down the road.”
Learn more about Texas House Bill 1129 and how the NRMLA is looking to clarify the parameters of deceptive advertising.