§ 45-702.01 — Reverse-mortgage loans; rules applicable; fees authorized; failure by licensee to make loan advances and cure default; forfeiture

Nebraska § 45-702.01

• Jurisdiction: Nebraska
• Ch. 45: Interest, Loans, and Debt

Text

(1)
Reverse-mortgage loans shall be governed by the following rules without regard
to the requirements set out elsewhere for other types of mortgage transactions:
(a) Payment in whole or in part is permitted without penalty at any time during
the period of the loan; (b) an advance and interest on the advance have priority
over a lien filed after the closing of a reverse-mortgage loan; (c) an interest
rate may be fixed or adjustable and may also provide for interest that is
contingent on appreciation in the value of the residential real estate; and
(d) the advance shall not be reduced in amount or number based on an adjustment
in the interest rate when a reverse-mortgage loan provides for periodic advances
to a borrower.
(2)
Reverse-mortgage loans may be made or acquired without regard to the following
provisions for other types of mortgage transactions: (a) Limitations on the
purpose and use of future advances or any other mortgage proceeds; (b) limitations
on future advances to a term of years or limitations on the term of credit
line advances; (c) limitations on the term during which future advances take
priority over intervening advances; (d) requirements that a maximum mortgage
amount be stated in the mortgage; (e) limitations on loan-to-value ratios;
(f) prohibitions on balloon payments; (g) prohibitions on compounded interest
and interest on interest; and (h) requirements that a percentage of the loan
proceeds must be advanced prior to loan assignment.
(3) A licensee may, in connection
with a reverse-mortgage loan, charge to the borrower (a) a nonrefundable loan
origination fee which does not exceed two percent of the appraised value of
the owner-occupied principal residence at the time the loan is made, (b) a
reasonable fee paid to third parties originating loans on behalf of the licensee,
and (c) such other fees as are necessary and required, including fees for
inspections, insurance, appraisals, and surveys.
(4) Licensees failing to make loan
advances as required in the loan documents and failing to cure the default
as required in the loan documents shall forfeit to the borrower an amount
equal to the greater of two hundred dollars or one percent of the amount of
the loan advance the licensee failed to make.

Legislative History

Source: Laws 2010, LB892, § 5.