§ 11-38-109 — Disclosure - total loan cost

(1) Any lender making reverse
mortgage loans shall provide to a borrower prior to closing on such a loan a written
statement of the projected total loan cost rate for all reverse mortgage loans
except for reverse mortgage loans subject to federal Truth in Lending Act, as
amended, total annual loan cost disclosure requirements. As used in this section,
total loan cost rate means the total of all loan costs including, but not limited to,
any origination fee, closing costs, servicing fee, insurance premium contingent
interest based on appreciation, and the annual interest rate charged on the reverse
mortgage balance which is expressed as a single annual average rate of interest.
Such statement shall include:

(a) An explanation of why the total loan cost rate on reverse mortgages is
greatest in the early years of the loan and decreases over the term of the loan; and

(b) A chart or table containing projections of the total loan cost rate at
certain anniversary dates during the term of the loan, beginning at the end of year
two and thereafter not more than every four years from the date of the loan to year
thirty and utilizing not less than three annual average home appreciation
percentages from between zero and ten percent.

Legislative History

Source: L. 92: Entire article added, p. 942, � 1, effective April 23. L. 96: IP(1) amended, p. 1561, � 14, effective July 1.