HOUSE BILL NO. 425

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H0425...............................................by REVENUE AND TAXATION
REVERSE MORTGAGES - Amends existing law to authorize the Idaho Housing and
Finance Association, banks, insurance companies, savings and loan
associations and credit unions to make and undertake commitments to make or
participate in the making of mortgage loans to persons over 62 years of age
to pay property taxes and other expenses on the person's residential
property.
                                                                        
01/19    House intro - 1st rdg - to printing
01/20    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 425
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO REVERSE MORTGAGES; AMENDING SECTION 67-6206, IDAHO CODE, TO  ALLOW
  3        THE  IDAHO  HOUSING  AND FINANCE ASSOCIATION TO MAKE AND UNDERTAKE COMMIT-
  4        MENTS TO MAKE OR PARTICIPATE IN THE MAKING OF MORTGAGE  LOANS  TO  PERSONS
  5        OVER  SIXTY-TWO   YEARS OF AGE TO PAY PROPERTY TAXES AND OTHER EXPENSES ON
  6        THE PERSON'S RESIDENTIAL  PROPERTY  AND  TO  MAKE  TECHNICAL  CORRECTIONS;
  7        AMENDING  SECTION  41-210,  IDAHO  CODE,  TO AUTHORIZE THE DIRECTOR OF THE
  8        DEPARTMENT OF INSURANCE TO PROMULGATE RULES AUTHORIZING INSURERS   TO MAKE
  9        AND UNDERTAKE COMMITMENTS TO MAKE OR PARTICIPATE IN THE MAKING OF MORTGAGE
 10        LOANS TO PERSONS OVER SIXTY-TWO  YEARS OF AGE TO PAY  PROPERTY  TAXES  AND
 11        OTHER  EXPENSES ON THE PERSON'S RESIDENTIAL PROPERTY; AND AMENDING SECTION
 12        67-2701, IDAHO CODE, TO  AUTHORIZE  THE  DIRECTOR  OF  THE  DEPARTMENT  OF
 13        FINANCE  TO  PROMULGATE RULES AUTHORIZING BANKS, SAVINGS AND LOAN ASSOCIA-
 14        TIONS AND CREDIT UNIONS   TO MAKE AND UNDERTAKE  COMMITMENTS  TO  MAKE  OR
 15        PARTICIPATE  IN  THE  MAKING  OF  MORTGAGE LOANS TO PERSONS OVER SIXTY-TWO
 16        YEARS OF AGE TO PAY PROPERTY TAXES AND OTHER EXPENSES ON THE PERSON'S RES-
 17        IDENTIAL PROPERTY AND TO MAKE TECHNICAL CORRECTIONS.
                                                                        
 18    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 19        SECTION 1.  That Section 67-6206, Idaho Code, be, and the same  is  hereby
 20    amended to read as follows:
                                                                        
 21        67-6206.  POWERS OF ASSOCIATION. The housing and finance association is an
 22    independent public body corporate and politic, exercising public and essential
 23    governmental functions, and having all the powers which are hereby declared to
 24    be  public  purposes  necessary  or convenient to carry out and effectuate the
 25    purposes and provisions of this act, including the following powers  in  addi-
 26    tion to others herein granted:
 27        (a)  To sue and to be sued; to have a seal and to alter the same at pleas-
 28    ure;  to  have  perpetual  succession; to make and execute contracts and other
 29    instruments necessary or convenient to the exercise of the powers of the asso-
 30    ciation; and to make and from time to time amend and repeal bylaws, rules, not
 31    inconsistent with this act, to carry into effect the powers  and  purposes  of
 32    the association.
 33        (b)  To  conduct  its  operations within any or all of the counties of the
 34    state.
 35        (c)  To cooperate with housing authorities throughout Idaho in the  devel-
 36    opment of housing projects.
 37        (d)  To  assign priorities for action and revise or modify said priorities
 38    from time to time.
 39        (e)  To make and execute agreements, contracts and other instruments  nec-
 40    essary  or convenient in the exercise of the powers and functions of the asso-
 41    ciation under this act, including contracts with any housing sponsor, mortgage
 42    lender, person, firm, corporation, governmental agency, or other  entity;  and
 43    to  include  in  any  contract  let in connection with a project, stipulations
                                                                        
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  1    requiring that the contractor and any subcontractors comply with  requirements
  2    as to minimum wages and maximum hours of labor, and comply with any conditions
  3    which  the  federal  government  may have attached to its financial aid of the
  4    project and to designate mortgage lenders to act for  and  in  behalf  of  the
  5    association,  with respect to originating or servicing and processing mortgage
  6    loans of the association, and to pay the reasonable value of service  rendered
  7    to  the  association by such mortgage lenders pursuant to contracts with mort-
  8    gage lenders.
  9        (f)  To lease, sell, construct, finance, reconstruct,  restore,  rehabili-
 10    tate, operate or rent any housing projects, nonprofit facilities or any dwell-
 11    ings,  houses,  accommodations,  lands,  buildings,  structures  or facilities
 12    embraced in any housing project or nonprofit facilities and,  subject  to  the
 13    limitations  contained  in  this  act,  to  establish  and revise the rents or
 14    charges therefor.
 15        (g)  To own, hold and improve real  or  personal  property;  to  purchase,
 16    lease,  obtain  options upon, acquire by gift, grant, bequest, devise, eminent
 17    domain or otherwise, any real or personal property or any interest therein.
 18        (h)  To acquire any real property; to  sell,  lease,  exchange,  transfer,
 19    assign,  pledge  or  dispose  of any real or personal property or any interest
 20    therein.
 21        (i)  To insure or provide for the insurance of any real or personal  prop-
 22    erty or operation of the association against any risks or hazards, and to pro-
 23    cure  or  agree to the procurement of insurance or guarantees from the federal
 24    government or other source for the payment or purchase of any bonds  or  parts
 25    thereof  issued  by  the  association, including the power to pay for any such
 26    insurance or guarantees.
 27        (j)  To invest any funds held in reserves or sinking funds, or  any  funds
 28    not  required for immediate disbursement, in property or securities in which a
 29    bank, as defined in the "bank act," title 26, Idaho Code, may  legally  invest
 30    funds  including  without  limitation, to agree to purchase the obligations of
 31    any federal, state or local government upon such conditions as the association
 32    may determine to be prudent and in its best interest.
 33        (k)  Within its area of operation: to investigate  into  living,  dwelling
 34    and housing conditions and into the means and methods of improving such condi-
 35    tions;  to  determine  where  slum areas exist or where there is a shortage of
 36    adequate, safe and sanitary dwelling accommodations for persons of  low-income
 37    low  income;  to  make  studies and recommendations relating to the problem of
 38    clearing, replanning and reconstruction of slum areas and the problem of  pro-
 39    viding  dwelling  accommodations  for persons of low-income low income, and to
 40    cooperate with the city, the county, the state or  any  political  subdivision
 41    thereof  in  action  taken  in connection with such problems; and to engage in
 42    research, studies and experimentation on the subject of housing.
 43        (l)  To participate in cooperative ventures with any  agencies,  organiza-
 44    tions  and individuals in order to undertake the provision of housing for per-
 45    sons of low-income low income, to undertake the provision of nonprofit facili-
 46    ties or agricultural facilities.
 47        (m)  To provide research and technical assistance  to  eligible  agencies,
 48    organizations  and  individuals  eligible  to  develop low cost housing and to
 49    research new low cost housing development and construction methods.
 50        (n)  To make and undertake commitments to make or participate in the  mak-
 51    ing of mortgage loans to persons of low-income low income and to housing spon-
 52    sors,  including  without  limitation federally insured mortgage loans, and to
 53    make temporary loans and advances in anticipation of permanent loans to  hous-
 54    ing sponsors; said mortgage loans to housing sponsors shall be made to finance
 55    the  construction, improvement, or rehabilitation of housing projects for per-
                                                                        
                                           3
                                                                        
  1    sons of low-income low income, and/or mixed income housing projects  upon  the
  2    terms and conditions set forth in this act; provided, however, that such loans
  3    shall  be  made  only  upon the determination by the association that mortgage
  4    loans are not otherwise available, wholly or in  part,  from  private  lenders
  5    upon reasonably equivalent terms and conditions.
  6        (o)  To  purchase,  or  make commitments to purchase or participate in the
  7    purchase of mortgage loans from mortgage lenders which loans  have  been  made
  8    for  the  construction, improvement, or rehabilitation of housing projects for
  9    persons of low-income low income and/or mixed income housing projects or loans
 10    which have been made to persons of low-income low income for residential hous-
 11    ing, upon terms set forth in this act; provided, however, that any  such  pur-
 12    chase  shall  be  made only upon the determination by the association that the
 13    mortgage loans to be made are not otherwise being  made  by  mortgage  lenders
 14    upon  reasonably  equivalent  terms and conditions. Also, to purchase, or make
 15    commitments to purchase or participate in the purchase of mortgage loans  from
 16    mortgage  lenders whether or not said loans were made to persons of low-income
 17    low income, upon terms set forth in this act; provided, however, that the pro-
 18    ceeds from such purchase or the equivalent  thereof  shall  be  reinvested  in
 19    obligations of the association, in mortgage loans to persons of low-income low
 20    income or in mortgage loans for housing projects for persons of low-income low
 21    income  and/or  mixed income housing projects, and provided that any such pur-
 22    chase shall be made only upon the determination by the  association  that  the
 23    mortgage  loans  to  be  made are not otherwise being made by mortgage lenders
 24    upon reasonably equivalent terms and conditions.
 25        (p)  To provide interim financing for  housing  projects  including  mixed
 26    income housing projects approved by the association, provided that the associ-
 27    ation has determined that such financing is not otherwise available from mort-
 28    gage lenders upon reasonably equivalent terms and conditions.
 29        (q)  To prescribe rules and policies in connection with the performance of
 30    its functions and duties.
 31        (r)  To  do  all other things deemed necessary and desirable to accomplish
 32    the objectives of this act.
 33        (s)  To borrow money and issue bonds and notes or  other  obligations,  to
 34    invest  the  proceeds  thereof  in any lawful manner and to fund or refund the
 35    same, and to provide for the rights of the holders of its obligations as  pro-
 36    vided  in  this  act  and  in connection therewith, to waive, by resolution or
 37    other document of the association, the exemption from federal income  taxation
 38    of  interest  on any of the association's obligations under existing or future
 39    federal law and to establish, maintain and preserve the association's  general
 40    obligation rating and any rating on its bonds, notes or other obligations.
 41        (t)  To receive and accept aid or contributions from any source.
 42        (u)  To employ architects, engineers, attorneys, accountants, housing con-
 43    struction  and  financial  experts  and  such  other advisors, consultants and
 44    agents as may be necessary in its judgment and to fix their compensation.
 45        (v)  To insure mortgage payments of any mortgage loan made for the purpose
 46    of constructing, rehabilitating, purchasing, leasing, or  refinancing  housing
 47    projects upon such terms and conditions as the association may prescribe.
 48        (w)  To  fix  and revise from time to time and charge and collect fees and
 49    charges in connection with loans made or other services provided by the  asso-
 50    ciation  pursuant  to  this  act, and to make and publish rules respecting the
 51    making and purchase of mortgage loans.
 52        (x)  To organize a nonprofit corporation to assist the association in pro-
 53    viding for housing projects.
 54        (y)  To enter upon and inspect  any  housing  project,  including  housing
 55    projects  undertaken by housing sponsors, for the purpose of investigating the
                                                                        
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  1    physical and financial condition thereof, and  its  construction,  rehabilita-
  2    tion,  operation,  management  and  maintenance,  and to examine all books and
  3    records with respect to capitalization,  income  and  other  matters  relating
  4    thereto.
  5        (z)  To  order such alterations, changes or repairs as may be necessary to
  6    protect the security of its investment in a housing  project  or  the  health,
  7    safety, and welfare of the occupants thereof.
  8        (aa) To make or purchase secured loans for the purpose of providing tempo-
  9    rary or permanent financing or refinancing of all or part of the project costs
 10    of any nonprofit facility or agricultural facility, including the refunding of
 11    any  outstanding  obligations,  mortgages or advances issued, made or given by
 12    any person for the project costs  of  a  nonprofit  facility  or  agricultural
 13    facility;  and  to  charge and collect interest on the loans for the loan pay-
 14    ments upon such terms and conditions, including without limitation bond rating
 15    and issuance conditions, as the board  of  commissioners  considers  advisable
 16    which are not in conflict with this chapter.
 17        (bb) As  security  for the payment of the principal of and interest on any
 18    revenue bonds issued and any agreements made in connection therewith, to mort-
 19    gage, pledge, or otherwise encumber any or  all  of  nonprofit  facilities  or
 20    agricultural  facilities  or  any part or parts thereof, whether then owned or
 21    thereafter acquired, and to assign any mortgage and repledge any security con-
 22    veyed to the association, to secure any loan made by the  association  and  to
 23    pledge the revenues and receipts therefrom.
 24        (cc) To  issue bonds for the purpose of financing all or part of the proj-
 25    ect cost on any nonprofit facility or agricultural facility and to secure  the
 26    payment of the bonds as provided in this chapter.
 27        (dd) To  purchase or sell by installment contract or otherwise, and convey
 28    all or any part of any nonprofit facility or agricultural  facility  for  such
 29    purchase price and upon such terms and conditions as this board of commission-
 30    ers considers advisable which are not in conflict with this chapter.
 31        (ee) To  lease  all  or any part of any nonprofit facility or agricultural
 32    facility for such rentals  and  upon  such  terms  and  conditions,  including
 33    options to purchase, as the board of commissioners considers advisable and not
 34    in conflict with this chapter.
 35        (ff) To  construct  and  maintain  one (1) or more nonprofit facilities or
 36    agricultural facilities, provided that the association shall not  operate  any
 37    nonprofit  facility  or agricultural facility as a business other than as les-
 38    sor, seller or lender. The purchase, holding and enforcing of mortgages, deeds
 39    of trust, or other  security  interests  and  contracting  for  any  servicing
 40    thereof  is  not  considered the operation of a nonprofit facility or agricul-
 41    tural facility as a business.
 42        (gg) To act as the designated housing resource clearinghouse in the  state
 43    for matters relating to affordable housing.
 44        (hh) To coordinate the development and maintenance of a housing policy for
 45    the state.
 46        (ii) To  enter  into  agreements  or other transactions and accept grants,
 47    reimbursements or other payments, with the cooperation of the United States or
 48    any agency thereof or of the state of Idaho or any agency thereof  or  munici-
 49    pality of the state in furtherance of the purposes of this act, including, but
 50    not  limited  to, the development, maintenance, operation and financing of any
 51    transportation project and to do any and all  things  necessary  in  order  to
 52    avail the association of such aid and cooperation.
 53        (jj) To  borrow  money  and  issue  bonds  and notes or other evidences of
 54    indebtedness thereof as hereinafter provided to finance  transportation  proj-
 55    ects approved and recommended by the transportation board.
                                                                        
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  1        (kk) To  make and undertake commitments to make or participate in the mak-
  2    ing of mortgage loans to persons over sixty-two (62) years of age to pay prop-
  3    erty taxes and other expenses on the person's residential property.
                                                                        
  4        SECTION 2.  That Section 41-210, Idaho Code, be, and the  same  is  hereby
  5    amended to read as follows:
                                                                        
  6        41-210.  GENERAL POWERS, DUTIES. (1) The director shall enforce the provi-
  7    sions  of  this  code,  and  shall execute the duties imposed upon him by this
  8    code.
  9        (2)  The director shall have the powers and authority expressly  conferred
 10    upon him by or reasonably implied from the provisions of this code.
 11        (3)  The  director  may  conduct  such  examinations and investigations of
 12    insurance matters, in addition to examinations  and  investigations  expressly
 13    authorized, as he may deem proper to determine whether any person has violated
 14    any  provision  of  this  code  or  to secure information useful in the lawful
 15    administration of any such provision. The cost of such additional examinations
 16    and investigations shall be borne by the state.
 17        (4)  For any document required to  be  filed  with  the  director  or  the
 18    department of insurance under the laws of this state, the director may specify
 19    the  place  and  manner  of filing of the document, including whether an elec-
 20    tronic or paper filing is required or acceptable.
 21        (5)  The director shall have such additional powers and duties as  may  be
 22    provided by other laws of this state.
 23        (6)  The  director shall promulgate rules authorizing insurers to make and
 24    undertake commitments to make or participate in the making of  mortgage  loans
 25    to  persons  over  sixty-two (62) years of age to pay property taxes and other
 26    expenses on the person's residential property.
                                                                        
 27        SECTION 3.  That Section 67-2701, Idaho Code, be, and the same  is  hereby
 28    amended to read as follows:
                                                                        
 29        67-2701.  DEPARTMENT OF FINANCE -- CREATION -- DIRECTOR -- ORGANIZATION --
 30    POWERS AND DUTIES. (a1) There is hereby created the department of finance. The
 31    department shall, for the purposes of section 20, article IV, of the constitu-
 32    tion  of  the  state of Idaho, be an executive department of state government.
 33    The governor shall appoint, with the advice  and  consent  of  the  senate,  a
 34    director  of  the department of finance who shall serve at the pleasure of the
 35    governor. The director shall have had at least five (5) years practical  expe-
 36    rience  in the banking business, or shall have served for a like period in the
 37    banking division of this or some other state.  Neither  the  director  of  the
 38    department  nor any administrator of a division in the department shall be the
 39    owner of or financially interested either directly or indirectly in any  bank-
 40    ing or insurance corporation subject to the supervision of the department.
 41        (b2)  The department of finance shall be composed of such divisions as are
 42    established  by  law  and  such  other units as may be administratively estab-
 43    lished. The director of the department shall appoint, subject to the  approval
 44    of  the  governor,  an administrator for such divisions as may be established.
 45    The director shall, subject to the approval of the governor, fix the salary of
 46    each administrator.
 47        (c3)  The director of the department of finance shall have power:
 48        1.(a)  To exercise the rights, powers and duties  vested  by  law  in  the
 49        department or in the director.
 50        2.(b)  To execute the laws relating to banks and banking.
 51        (c)  To promulgate rules to allow banks, savings and loan associations and
                                                                        
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  1        credit  unions to make and undertake commitments to make or participate in
  2        the making of mortgage loans to persons over sixty-two (62) years  of  age
  3        to pay property taxes and other expenses on the person's residential prop-
  4        erty.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                            RS 15512

This legislation authorizes the Idaho Housing and Finance
Association, Director of the Department of Insurance and the
Director of the Department of Finance to promulgate rules 
authorizing their respective participants to engage in the
issuance of reverse mortgages to persons over 62 years of age for
the purpose of paying property taxes that they otherwise may not
be able to afford.
It is anticipated that there will not be wide spread use of the
this vehicle, but for certain low income individuals living in
homes located on land that is rapidly increasing in value, this
will be important legislation.


                          FISCAL IMPACT

None, except for the cost of promulgating rules.



Contact
Name:  Rep. Lake 
Phone: 332-1000
Sen. Keough



STATEMENT OF PURPOSE/FISCAL NOTE                         H 425