Colorado Governor Jared Polis signed a bill into law earlier this month that helps protect reverse mortgage borrowers from foreclosure if they are impacted by natural disasters. The law was passed as part of a collaboration between state lawmakers and members of the reverse mortgage industry.
The bill, HB23-1266, or “Reverse Mortgage Repayment When Home Uninhabitable,” suspends reverse mortgages from the repayment requirement when a “greater force” renders the property uninhabitable as a principal residence. A final revision of the bill passed in April with a vote of 30-5.
The bill extends the timeline from one to three years for HECM borrowers to be out of their homes if they are impacted by natural disasters.
The bill, spearheaded by Rep. Kyle Brown (D), who represents a reverse mortgage borrower impacted by the issue, was sent to Polis’ desk on May 5. In February, Brown vowed to to take a closer look at how the reverse mortgage occupancy requirement is impacted by natural disasters, and said he hoped to succeed where previous Colorado state congresses had failed to act.
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