§ 47-30-101. Short Title
This chapter shall be known and may be cited as the “Home Equity Conversion Mortgage Act.”
§ 47-30-102. Chapter Definitions
As used in this chapter, unless the context otherwise requires: “Authorized lender” or “lender” means: A bank, savings and loan association, savings bank, savings institution, or credit union chartered under the laws of the United States or of Tennessee; The Tennessee housing development agency (THDA); provided, that such agency has authority by THDA board resolution […]
§ 47-30-103. Authorized Lenders — Designation — Application
No person, firm, or corporation shall engage in the business of making reverse mortgage loans, unless such person, firm, or corporation is an authorized lender. The Tennessee housing development agency, and any bank, savings institution, or credit union, shall be designated an authorized lender by providing notice, not less than thirty (30) days prior to […]
§ 47-30-104. Compliance — Noncomplying Loans Unenforceable — Counseling
No authorized lender shall issue a reverse mortgage loan contract unless it complies with all requirements for participation in HUD’s Home Equity Conversion Mortgage Program (or other similar federal reverse mortgage loan program from time to time created) and is insured by the federal housing administration or other similar federal agency or is a Fannie […]
§ 47-30-105. Contract for the Payment of Interest
Notwithstanding any other law to the contrary, the parties to a reverse mortgage loan may contract for the payment of interest at a rate which does not exceed the rate permitted for home loans under chapter 15 of this title. Interest shall be deferred until the earliest occurrence of one (1) or more events specified […]
§ 47-30-106. Contract May Require Borrower to Pay Certain Taxes, Premiums and Assessments
A reverse mortgage loan contract may provide that it is the primary obligation of the borrower to pay some or all of the property taxes, hazard insurance premiums, private or federal mortgage insurance premiums, and assessments, in a timely manner, and that the failure of the borrower to make these payments and to provide evidence […]
§ 47-30-107. Fees — Calculation of Outstanding Loan Balance — Prepayment
If a reverse mortgage loan contract allows for a change in the payments or payment options, the lender may charge a reasonable fee when payments are recalculated. The reverse mortgage loan contract may provide for: A monthly service fee; A fee for mortgage insurance premiums, which may be collected monthly or in advance. These fees […]
§ 47-30-108. Amount Owed by Borrower When Loan Is Due — Enforcement of Debt
When a reverse mortgage loan, other than a Fannie Mae Reverse Mortgage Loan, becomes due, if the borrower mortgaged one hundred percent (100%) of the full value of the house, then the amount owed by the borrower shall not be greater than: The fair market value of the house, minus sale costs; or The outstanding […]
§ 47-30-109. Provision of Information to the Commissioner
On forms prescribed by the commissioner, all authorized lenders shall provide all of the following information to the commissioner for dissemination to all counselors who provide counseling to prospective reverse mortgage borrowers: The borrower’s rights, obligations, and remedies with respect to the borrower’s temporary absence from the home, late payments by the lender, and payment […]
§ 47-30-110. Lender to Provide Borrower With Name of Agent to Answer Inquiries — Annual Statement of Account
At the closing of the reverse mortgage loan, the lender shall provide to the borrower the name of the lender’s employee or agent who has been designated specifically to respond to inquiries concerning reverse mortgage loans. This information shall be provided by the lender to the borrower at least annually, and whenever the information concerning […]
§ 47-30-111. Lender’s Default — Applicability
A lender’s failure to make loan advances to the borrower under the reverse mortgage loan contract shall be deemed the lender’s default of the contract. Upon the lender’s default, the lender shall forfeit any right to collect interest or service charges under the contract. The lender’s right to recovery at loan maturity shall be limited […]
§ 47-30-112. Borrower’s Default — Terms and Conditions
A reverse mortgage loan contract may provide for a borrower’s default, thereby triggering early repayment of the loan, based only upon one (1) or more of the following terms and conditions: The borrower fails to maintain the residence as required by the contract; The borrower sells or otherwise conveys title to the home to a […]
§ 47-30-113. Notice of Foreclosure — Continuation of Interest
When a borrower’s obligation to repay the reverse mortgage loan is triggered under § 47-30-112, in addition to all rights conferred upon owners and borrowers under title 35, chapter 5, the lender must give the borrower not less than sixty (60) days’ notice of its intent to initiate foreclosure proceedings. If the contract so provides, […]
§ 47-30-114. Future Advances — Exemption From Other Law
A reverse mortgage may provide that it secures not only existing indebtedness or advances made contemporaneously with the execution thereof, but also future advances, whether obligatory or optional, or both, and whether made under open-end credit agreements or otherwise, to the same extent as if such future advances were made contemporaneously with the execution of […]
§ 47-30-115. Prohibited Acts
Reverse mortgage lenders are prohibited from engaging in any of the following acts in connection with the making, servicing, or collecting of a reverse mortgage loan: Misrepresenting material facts, making false promises, or engaging in a course of misrepresentation through agents or otherwise; Failing to disburse funds in accordance with the terms of the reverse […]
§ 47-30-116. Rules — Notice of Violation — Penalties — Civil Actions
The commissioner shall adopt rules necessary to implement and enforce this chapter. Upon finding probable cause to believe that an authorized lender or any other person, firm, or corporation is in violation of this chapter, or of any law or any rule or regulation of this state, the United States, or an agency of the […]
§ 47-30-117. Legislative Intent — Construction With Other Laws
It is the intent of the general assembly to authorize reverse mortgage loans under the provisions, terms and conditions imposed by this chapter. Nothing in this chapter shall be construed to apply to or restrict any loan, mortgage, or deed of trust which is valid under any other provision.
§ 47-30-118. Fannie Mae Reverse Mortgage Loans
When a Fannie Mae Reverse Mortgage Loan becomes due, the amount owed by the borrower shall not be greater than: The fair market value of the house; or The outstanding balance of the loan, including any equity share, if applicable under the terms of the contract, whichever is less. The lender shall enforce the debt […]