(1) Any lender making reverse mortgage loans shall provide to a borrower prior to closing on such a loan a written statement of the projected total loan cost rate for all reverse mortgage loans except for reverse mortgage loans subject to federal Truth in Lending Act, as amended, total annual loan cost disclosure requirements. As used in this section, total loan cost rate means the total of all loan costs including, but not limited to, any origination fee, closing costs, servicing fee, insurance premium contingent interest based on appreciation, and the annual interest rate charged on the reverse mortgage balance which is expressed as a single annual average rate of interest. Such statement shall include:
(a) An explanation of why the total loan cost rate on reverse mortgages is greatest in the early years of the loan and decreases over the term of the loan; and
(b) A chart or table containing projections of the total loan cost rate at certain anniversary dates during the term of the loan, beginning at the end of year two and thereafter not more than every four years from the date of the loan to year thirty and utilizing not less than three annual average home appreciation percentages from between zero and ten percent.
Source: L. 92: Entire article added, p. 942, � 1, effective April 23. L. 96: IP(1) amended, p. 1561, � 14, effective July 1.
Cross references: For the Truth in Lending Act, see 15 U.S.C. � 1601 et seq.
11-38-110. Treatment of reverse mortgage loan proceeds by public benefit programs. (1) Reverse mortgage loan payments made to a borrower shall be treated as proceeds from a loan and not as income for the purpose of determining eligibility and benefits under means-tested programs of aid to individuals.
(2) Undisbursed funds under a reverse mortgage shall be treated as equity in a borrower's home and not as proceeds from a loan for the purpose of determining eligibility and benefits under means-tested programs of aid to individuals.
(3) This section shall apply to any law relating to means-tested programs of aid provided by this state, including but not limited to supplemental security income, low-income energy assistance, and the Colorado Medical Assistance Act, articles 4, 5, and 6 of title 25.5, C.R.S.
Source: L. 92: Entire article added, p. 943, � 1, effective April 23. L. 2006: (3) amended, p. 2000, � 40, effective July 1.