Originally introduced back in February of 2009, the Reverse Mortgage Elder Protection Act took another step forward in the state assembly last week. The bill is being applauded by both consumer groups and industry professionals, since it recognize the value of reverse mortgages to seniors, as well as the need to protect them  from various practices.

The primary mandates in the bill prevent a reverse mortgage lender or broker from:

1. Cross-selling other financial products such as annuities, unless there are safeguards to prevent a conflict of interest.
2. Referring clients to any outside party for the purchase of financial products.
3. Allowing a client to enter into a reverse mortgage without providing certain disclosures.

Further, the Reverse Mortgage Protection Act requires the lender to provide the borrower with a list of no less than ten (10) referrals to HUD-approved reverse mortgage counseling agencies.

Perhaps the biggest protection though, is that the bill would allow seniors to rescind their new reverse mortgage within thirty (30) days.

Click here to read the full text of the bill.