Reverse Mortgage Legislation Update – February 25, 2010

While the NRMLA Regional Meeting is underway in Atlanta, the economy is back on the front page of the news this week in Washington. It was announced yesterday that new home sales fell to an all-time low, sending reverberations through the housing and mortgage markets, as well as the economy as a whole. The drop of 11.2 percent in January came as a surprise, since analysts had predicted a 3.5 percent increase. However, others had predicted that the housing market rebound would resemble a “w,” and these statistics support that.

In the same vein, Federal Reserve Chairman Benjamin Bernanke addressed Congress yesterday. Bernanke’s comments seemed to indicate that low short-term interest rates would continue for the time being, saying the bank does not intend to raise short-term interest rates any time soon.

Senator Christopher J. Dodd (D-CT), chairman of the Senate Banking Committee, met with Senator Bob Corker (R-TN) on Tuesday in hopes of building a consensus for the bipartisan Senate Financial Services Bill that is expected next week. Meanwhile, U.S. Treasury Secretary Timothy Geithner called a meeting for leaders of the U.S. Chamber of Commerce, the American Bankers Association, the Financial Services Forum, and other groups, today to urge them not to obstruct the legislative effort.

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The White House has said it will not back down from efforts to restrict proprietary trading (the Volcker rule) or create the Consumer Financial Protection Agency (CFPA), an organization which, if the Reverse Mortgage Amendment passed in the House of Representatives makes it into the final version of the bill, will regulate reverse mortgages as well.

Finally, a Florida State Senator proposed new reverse mortgage legislation.

Written by Reva Minkoff

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