Senate advances reverse-mortgage regulation bill targeting nonfederally insured products

Senator Harper presented Senate Bill 120 to establish a Utah reverse-mortgage act that defines the product, sets counseling and review requirements, provides a cooling-off period and clarifies lender priority and enforcement for non‑federally insured reverse-mortgage products.

"So senate bill 120 goes through and establishes the Utah reverse mortgages act," Harper said, explaining the bill borrows provisions from federal rules and from other states that have enacted similar protections. He said the bill does not change protections for federally insured reverse mortgages but fills a regulatory gap for non‑federally insured offerings. "Basically, what we're doing is saying, yes, you can do a reverse mortgage, but you need to operate under these things," the sponsor said, describing consumer-protection elements such as counseling and clearer foreclosure and lender-priority rules.

Senators asked whether reverse mortgages currently exist in Utah and whether the bill would apply to federally insured products; the sponsor clarified it targets nonfederally insured reverse mortgages and aims to provide clarity and remedies if lenders fail to comply with contract terms. The sponsor moved the bill for third reading and the transcript records it advanced with an affirmative roll call.

Supporters described the bill as a preventative measure drawing on other states’ experience to protect homeowners—particularly seniors—who might otherwise lose homes after entering unfamiliar loan contracts. Questions noted that the bill would not restrict federally insured reverse mortgages but would create parallel consumer protections for other products.