On January 11, 2017, Rep. Jonathan Singer and Sen. Matt Jones introduced HB 17-1026, “Concerning the Suspension of a Borrower’s Obligation to Repay a Reverse Mortgage when a Force Majeure Renders the Subject Property Uninhabitable as a Principal Residence.”
Under current law, the borrower in a reverse mortgage transaction is relieved of the obligation to occupy the subject property as a principal residence if the borrower is temporarily absent for up to 60 days or, if the property is adequately secured, up to one year. The bill adds a third exception to the principal-residence requirement to cover situations in which a natural disaster or other serious incident beyond the borrower’s control renders the property uninhabitable. The maximum time allowable for a temporary absence under these circumstances is 5 years.
The bill was introduced in the House and assigned to the Local Government committee. It is scheduled to be heard in committee on January 25, 2017, at 1:30 p.m.