The US House of Representatives passed the Transportation, Housing and Urban Development (THUD) appropriations bill for FY 2011 by a vote of 251 to 167 on Thursday.

When the debate began, the Federal Housing Administration’s reverse mortgage program had a $150 million appropriation but passed with $140 million.  While the number may be lower, debate among members of the House proved that representatives in Washington, DC, are getting behind the program.

Rep. E.B. Johnson, D-Texas, introduced an amendment to increase funding for HUD’s Community Development Grant program by $10 million and reduce funding for the Mutual Mortgage Insurance Program by the same amount.  The money would be taken from the reverse mortgage program.

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The Obama Administration has announced a conference on Housing Finance Reform to happen in the upcoming month. On August 17, the “Conference on the Future of Housing Finance” will take place in Washington, D.C. at the Treasury Department. Yet again, the Administration invites the public to get involved in the future of the country’s housing finance system, expanding opportunities for public opinion on the matter.

An important topic of discussion will focus on Fannie Mae and Freddie Mac, the mortgage-finance powerhouses seized by the U.S. Treasury in September 2008. The government is still managing the ongoing consequences of poor credit choices from bad loans made by Fannie Mae and Freddie Mac during the housing bubble from 2005 to 2007.

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As part of the Department of Housing and Urban Development’s new HECM counseling protocols, counselors are given the ability to withhold a HECM certificate if borrowers can’t demonstrate basic knowledge of reverse mortgage concepts.  The new powers are part of guidelines recently issued to improve the quality of counseling provided to seniors.

According to HUD, counselors are required to ask borrowers a set of 10 questions during the session and if borrowers are unable to answer at least 5 correctly, they’re required to withhold the certificate.  ”If the client cannot provide adequate answers for five questions, there may be concern about his or her ability to make an adequately informed reverse mortgage decision,” says HUD.

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Bank of America Merrill Lynch is looking to sell a $92 million bond backed by “troubled” reverse mortgages backed by the Federal Housing Administration according to Reuters.

The bond includes 760 HECMs with borrowers are all in distress situations, including foreclosure. Whether or not they’re T&I defaults isn’t clear, but one analyst told RMD they’re likely “fall-out from various trades and flawed originations.”

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I’m sure the majority of RMD readers saw MSNBC’s “Consumer Man” terrible article on reverse mortgages.

MSNBC’s Herb Weisbaum wrote that consumer advocates believe the country is headed toward another mortgage meltdown in the reverse mortgage industry. “Many of the players from the subprime disaster have now moved into the reverse mortgage market,” he says.

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Federal Regulators issued final rules requiring mortgage loan originators employed by financial institutions register with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE).

The rule requires originators who are employed by agency-regulated institutions to be registered with the Nationwide Mortgage Licensing System and Registry.  Created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, residential mortgage loan originators must provide their information and fingerprints for background checks.

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The Department of Housing and Urban Development published a new “Home Equity Conversion Mortgage Required Documents for Endorsement” list.

According to Mortgagee 2010-22, effective October 4, 2010, mortgagees are required to use the new list when submitting case binders to the Homeownership Centers.

This endorsement list replaces the “Home Equity Conversion Mortgage Required Documents for Endorsement” list attached to Mortgagee Letter 2004-39, and incorporates changes referred to in the following Mortgagee Letters:

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