May 11, 2015
by Scott Lundberg
Lundberg & Associates – USFN Member (Utah)
2015 was a fairly quiet legislative year in Utah, as it relates to legislation with an impact on mortgage servicers.
However, Senate Bill 0120 (Regulation of Reverse Mortgages) will be of special interest to default servicers, while on the other hand, House Bill 0227 (Real Estate Amendments) addresses only origination. Both bills are effective May 12, 2015.
Senate Bill 0120 (Regulation of Reverse Mortgages) — enacts the Utah Reverse Mortgage Act, Utah Code sections 57-28-101, et seq. It sets forth requirements for reverse mortgages in Utah and addresses the treatment of reverse mortgage loan proceeds, priority, foreclosure, and lender default. It contains a safe harbor for lenders making reverse mortgages insured by the U.S. Department of Housing and Urban Development, if they comply with the requirements found in 12 U.S.C. Section 1715z-20 and 24 C.F.R. Part 206.
With respect to foreclosure, the bill requires that the servicer give a borrower written notice of the default, and provide at least 30 days after the day on which the borrower receives the notice to cure the borrower’s default. This requirement will necessitate a change in the breach or demand letters for servicers that currently allow 30 days from the day that the letter or notice is sent.
House Bill 0227 (Real Estate Amendments) — amends a number of provisions relating to real estate. The principal areas of interest (to mortgage servicers) in the bill are: (a) modification of licensing requirements; (b) affirmative disclosure requirements associated with the lending process; and (c) prohibited conduct for those engaged in the business of residential mortgage loans.
Another bill, House Bill 0221, which would have changed the procedure for foreclosure of owners association assessment liens from nonjudicial to judicial, was introduced in the 2015 session but did not leave committee.
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