Real Estate
Home›Real Estate›Mortgages›NRMLA urges CFPB to overhaul reverse mortgage disclosu…
NRMLA urges CFPB to overhaul reverse mortgage disclosure rules
The trade group said TALC relies on life-expectancy tables that should be updated and that borrowers often misunderstand percentage-based TALC.
The National Reverse Mortgage Lenders Association (NRMLA) has asked the Consumer Financial Protection Bureau (CFPB) to overhaul how reverse mortgages are disclosed to consumers, arguing that the current approach is not tailored to the product. In an Aug. 10 comment letter responding to the CFPB’s request for information on promoting access to mortgage credit, NRMLA said reverse mortgages need a product-specific disclosure framework, including an integrated reverse mortgage form that consolidates key information for borrowers. NRMLA also recommended changing the primary presentation in disclosures. The group urged replacing or supplementing Total Annual Loan Cost (TALC) with dollar-based scenarios, while keeping TALC percentages as secondary information, and it said TALC calculations depend in part on life expectancy tables that should be updated with more recent demographic data. The association pointed to Federal Reserve Board consumer testing from 2010, saying participants frequently misunderstood the TALC table and sometimes treated its percentages as an interest rate that declines over time. NRMLA argued dollar-based tables could address that confusion by showing loan balances and home values under multiple scenarios, including flat home value, and by illustrating cumulative amounts received, interest and fees added, and projected outstanding balances at selected points in time.