The Star Tribune has been publishing back and forth commentary on the decision by Minnesota Govenor Tim Pawlenty’s decision to veto a reverse mortgage bill earlier this year which would’ve driven up the costs of the loans to consumers in the state.
It started with the Lori Swanson, the states Attorney General, who wrote Reverse-mortgage hype is coming — we’d better be ready after seeing the bill she introduced get vetoed. She wrote that:
With the chill in the real estate finance market, some of the same lenders and brokers who once sold toxic subprime mortgages are now aggressively pitching reverse mortgages to our senior citizens.
Bad reverse mortgage lending practices will bring catastrophe to the individual senior citizens who deserve better than to have their nest-eggs pilfered by high-pressure sales tactics.
A few weeks later, Gail Wempner, a reverse mortgage specialist responded to Swanson in Seniors need reverse mortgage option.
“I applaud Gov. Tim Pawlenty’s veto of the proposed legislation on reverse mortgages, which I believe was well-meaning but misguided and untenable. It would have caused irreparable damage to reverse mortgage lending in Minnesota.”
Wempner points to a comment from State Sen. Tarryl Clark, DFL-St. Cloud, who testified at a recent hearing that "although some government-guaranteed reverse mortgages are regulated and insured by HUD, many are not, leaving seniors without protections and standards." Wempner asks, “What reverse mortgage products is she talking about?” She added that:
If the main concern is that so-called ”private reverse mortgages” should be more regulated, let’s regulate them. But leave the federally insured home equity conversion mortgage alone.
Just a few days later, Michele Kimball, Minnesota’s state director of AARP, wrote an editorial piece in response to Wempner about why it supported the bill.
We believe that these products should be used as a last resort for most consumers. However, we know that they can be a useful safety net for many Minnesotans who have no other choice and want to remain living independently. AARP wants to make sure these products are on the market — and that they are safe, reliable and easily understood by consumers.
If you read all three of the editorial pieces it’s clear that each individual or group wants to protect seniors, but there is an obvious disconnect between all of the parties about what is currently being done to ensure they’re protected.
It seems like everyone is to interested in speaking out about protecting seniors, but no one is actually listening to what is already being done.