Let's not rewrite history.

One of the last acts of President William Jefferson Clinton was to sign the American Homeownership and Economic Opportunity Act of 2000 (PL 106–569) into law on Dec. 27, 2000. Section 201(c) of that act was codified as 12 USC 1715z-20(l). Section 201(c) waived all upfront MIP if all of the available proceeds were used to purchase Long-Term Care insurance.

The measure was so inappropriate and ill-advised that HUD refused to implement it. To justify its position HUD authorized a study that was published in May 2003. You can read it at:

http://www.huduser.org/Publications/pdf/Actuari…

The MIP/LTCi provision was deleted from law by Section 2122(a)(6) of the Housing and Economic Recovery Act of 2008 (“HERA”, PL 110-289) which was enacted on July 30, 2008. It seems even Congress thought better of what it had done over seven years earlier. You can read 12 USC 1715z-20(l) as it existed before enactment of HERA at:

http://law.justia.com/us/codes/title12/12usc171…

You can read the HERA provision at:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc….

The value of LTCi can be argued by its proponents. What Congress enacted was hardly reasonable or responsible legislation. You may not agree with how HUD handled the matter but many believe what HUD did stopped a potential abuse and most likely stopped Congress from enacting similar legislation for other insurance and financial products.

Those in our industry, who are in the position to know such things, claim that the staff of Senator McCaskill reads the articles and comments in RMD regularly so here is a reminder to the Senator:

Senator McCaskill (D-MO), please remember it was NOT the reverse mortgage industry that legislated the inappropriate use of HECM proceeds; it was a Republican controlled Congress enabled by a Democratic President. It was HUD that stood up to Congress and the President and refused to implement it. HUD did the right thing.

I believe the incentive that was discussed was a refund of the upfront FHA Insurance fee for those that used any portion of the Reverse Mortgage proceeds to purchase a Qualified LTCI Policy.

Now, you hear uneducated law makers refer to LTCI as an “inappropriate use for Reverse Mortgage proceeds” (such as in the recent AARP E Street Segment), despite the lengthy studies by The George Washington University (D.C.), the White House Conference on Aging Reports and despite Common Sense.

Travis De Renzo
http://www.HECM.net

You are right. I think one certain Senator needs to read these findings.

“Just over one-third know that most long-term care services are received at home. While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.”