AARP Supports Additional Protections for Reverse Mortgages in FinReg

While the House and Senate have yet to vote on the financial reform bill that made it out of the conference report last week, AARP is voicing its support for the piece of legislation.

“AARP is pleased that members of Congress, on both sides of the aisle, have worked together to create more transparency and accountability for consumers and investors as they navigate the financial marketplace,” said Nancy LeaMond,  AARP Executive Vice President in a statement.  “This legislation will help ensure that consumers know what they are buying and that if scammed, they know where to turn for help.”

If signed into law, the bill a would create a new Consumer Financial Protection Bureau housed in the Federal Reserve which has the authority to enforce rules pertaining to consumer lending in mortgages, credit cards, and other financail products.

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The burueau would also be required to conduct a study on reverse mortgages to determine any deceptive or abusive practices within one year of passage.  The study would also determine whether suitability standards are necessary, as well as safeguards to protect consumers from being sold reverse mortgages to fund inappropriate annuities, investments, and other financial products.

“New rules of the road will be established that help prevent consumers from buying a mortgage they can’t afford or being hit with hidden fees, and strengthen protections for reverse mortgages,” said Leamond.

Passage of the bill is expected in the House on Tuesday but the Senate is a differen’t story.  The Wall Street Journal reported on Monday that the death of Senator Robert Byrd (D-West Virginia) could push the Senate vote back until after July 4.  Additionally, Sen. Scott Brown (R-Massachusetts) said he will vote against the bill due to concerns over a $19 billion assessment on the nation’s biggest banks and hedge funds which he feels amounts to raising taxes.

Brown was one of four Republicans who supported the bill the first time in the Senate and it’s likely his vote will be needed in order to pass.

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  • All of the celebration in Washington was far too premature. While a tweak here and this bill will no doubt pass but not before this Sunday. How many claims have we heard in DC before (particularly by AARP) how a bill will be good for the country (such as our origination fee reductions in HERA)? One has to wonder where this bill will “blindside” us and when we will know it.

    I am a cynic and I believe this bill will just be another Sarbanes-Oxley, a truly great bill in the mind of its authors but a terribly costly and burdensome law with few real benefits. What Sarbanes-Oxley failed to address was Madoff, Stanford, and a few other minor problems.

    Why any part of the first twelve months of the bureau must legally be dedicated to closely reviewing reverse mortgages is far worse than an overkill. It will allocate scarce resources to oversee something that is operating well. Why so many Democrats have focused on declaring that reverse mortgages are the next subprime crisis is beyond belief. This is why there is a kind of politics that takes place within the Belt Way and another which takes place in the rest of the US.

  • The AARP is not objective when it comes to reverse mortgages. They take a far left consumer approach that will ruin reverse mortgages for the seniors they swear to protect. They jumped into health care debate and sought to bankrupt Medicare now it will have to be repealed and redone. Seniors can't afford AARP anymore.

    • Jerome,

      Whenever I complain about the odd antics of Ken Scholen in his attempts to reduce our compensation, a friend of mine who has known Ken for years and has been in the industry almost since its inception reminds me: “… never forget that is just what consumer advocates do.” (Ken was a consultant to AARP for years.) While most senior advocates come from a left wing position, some do not.

      Senator Thomas Coburn, M.D. (R-OK), a prominent proponent of right wing values, is fundamentally opposed to the HECM program and ALL of our positions. He is not a senior advocate per se but since the U.S. Constitution never granted the right for the federal government to be in competition with private enterprise, because FHA is an insurance enterprise, Senator Coburn objects to all of its programs. By his actions alone, he personally kept the FHA Modernization Bill from being enacted throughout 2007. Had he released the bill then, we might not have had a change in the origination fee structure or a switch in the program from the General Insurance category to the Mutual Mortgage Insurance category in HERA in 2008.

      Some of the most “left wing” members of Congress including Senators Barbara Boxer (D-CA) and Dianne Feinstein (D-CA) and Representatives Barney Frank (D-MA) and Maxine Waters (D-CA) are among the HECM program’s biggest supporters. It is also true that some of the most outspoken and caustic rhetoric against HECMs comes from Democrats, chief of who is Senator Claire McCaskill (D-MO).

      So while I agree with your generalization about AARP and senior advocates, I do not ascribe to your position that it is all from the “far left.” I very much appreciate the support we do receive from the left wing of the Democratic Party.

  • Jerome,rnrnWhenever I complain about the odd antics of Ken Scholen in his attempts to reduce our compensation, a friend of mine who has known Ken for years and has been in the industry almost since its inception reminds me: u201cu2026 never forget that is just what consumer advocates do.u201d (Ken was a consultant to AARP for years.) While most senior advocates come from a left wing position, some do not.rnrnSenator Thomas Coburn, M.D. (R-OK), a prominent proponent of right wing values, is fundamentally opposed to the HECM program and ALL of our positions. He is not a senior advocate per se but since the U.S. Constitution never granted the right for the federal government to be in competition with private enterprise, because FHA is an insurance enterprise, Senator Coburn objects to all of its programs. By his actions alone, he personally kept the FHA Modernization Bill from being enacted throughout 2007. Had he released the bill then, we might not have had a change in the origination fee structure or a switch in the program from the General Insurance category to the Mutual Mortgage Insurance category in HERA in 2008.rnrnSome of the most u201cleft wingu201d members of Congress including Senators Barbara Boxer (D-CA) and Dianne Feinstein (D-CA) and Representatives Barney Frank (D-MA) and Maxine Waters (D-CA) are among the HECM programu2019s biggest supporters. It is also true that some of the most outspoken and caustic rhetoric against HECMs comes from Democrats, chief of who is Senator Claire McCaskill (D-MO).rnrnSo while I agree with your generalization about AARP and senior advocates, I do not ascribe to your position that it is all from the u201cfar left.u201d I very much appreciate the support we do receive from the left wing of the Democratic Party.rn

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