S.F. No. 127 Summary

• Requires reverse mortgage loan servicers to send copies of written communications regarding delinquencies, defaults, and unfulfilled loan obligations to a borrower-designated third-party by first class mail.

• Allows servicers to communicate with third-party designees via email regarding borrower failure to respond and permits email communication if the designee initiates contact.

• Servicers must also send copies of these communications to an independent counseling agency if the borrower consents on an authorization form.

• Establishes a cause of action for borrowers if servicers fail to comply with notification requirements, with a rebuttable presumption of non-compliance absent a recorded affidavit.

• Requires lenders to provide borrowers with a blank authorization form in 14-point type during reverse mortgage counseling, allowing borrowers to name a third-party designee to receive delinquency and default notices.

• Effective August 1, 2020, for reverse mortgage loans originated on or after that date.