Missouri Laws 443.903 – Reverse mortgage regulations
Notwithstanding any other provisions of law to the contrary, reverse mortgage loans shall be governed by the following:
(1) Payment in whole or in part is permitted without penalty at any time during the period of the loan;
Terms Used In Missouri Laws 443.903
- Appraisal: A determination of property value.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- following: when used by way of reference to any section of the statutes, mean the section next preceding or next following that in which the reference is made, unless some other section is expressly designated in the reference. See Missouri Laws 1.020
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Property: includes real and personal property. See Missouri Laws 1.020
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Statute: A law passed by a legislature.
- Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
(2) An advance made under a reverse mortgage and interest on the advances have priority over a lien filed after the closing of a reverse mortgage loan;
(3) A reverse mortgage loan may provide for an interest rate which is fixed or adjustable and may also provide for interest that is contingent on appreciation in the value of the property;
(4) If a reverse mortgage loan provides for periodic advances to a borrower, the advances may not be reduced in amount or number based on an adjustment in the interest rate;
(5) Lenders failing to make loan advances as required in the loan agreement and failing to cure the default as required in the loan agreement shall forfeit an amount equal to the greater of two hundred dollars or one percent of the amount of the loan advance the lender failed to make;
(6) The repayment requirement is also expressly subject to the following additional conditions:
(a) Temporary absences from the home not to exceed sixty consecutive days do not cause the mortgage to become due and payable;
(b) Temporary absences from the home exceeding sixty consecutive days, but less than six months, do not cause the mortgage to become due and payable so long as the borrower has taken prior action which secures the home in a satisfactory manner;
(c) The lender’s right to collect reverse mortgage loan proceeds is subject to the applicable statute of limitations for loan contracts. Notwithstanding the applicable statute of limitations for loan contracts, the statute of limitations commences on the date that the mortgage becomes due and payable;
(d) The lender must prominently disclose any interest or other fees to be charged during the period that commences on the date that the mortgage becomes due and payable and ends when repayment in full is made;
(7) The following fees and charges may be charged to the borrower, and financed by the lender, in connection with a reverse mortgage loan, except for loans insured or guaranteed by agencies of the federal government in which case federal law or regulation shall apply:
(a) A nonrefundable origination fee not to exceed two percent of the principal;
(b) Fees and charges prescribed by law actually and necessarily paid to public officials for perfecting, releasing or satisfying a security interest related to the reverse mortgage loan;
(c) Recording taxes to perfect documents;
(d) Bona fide closing costs paid to third parties, which shall include:
a. Fees or premiums for title examination, title insurance or similar purposes, including surveys;
b. Fees for preparation of a deed, settlement statement or other documents;
c. Fees for notarizing deeds and other documents;
d. Appraisal fees; and
e. Fees for credit reports;
(e) A charge for insurance against loss of, or damage to, property where no such coverage already exists;
(f) Fixed monthly servicing fees, repair administration fees and payment plan change fees;
(8) As a convenience to the borrower, reverse mortgage loan applications may be taken by the lender over the telephone or at the borrower’s home and reverse mortgage loans may be closed by mail or at a title company’s office.