The U.S. House of Representatives today passed the Reverse Mortgage Stabilization Act of 2013.
The bill, passed on the House “suspension calendar” would authorize the Department of Housing and Urban Development to make changes to the Home Equity Conversion Mortgage program by mortgagee letter, authority which HUD has been seeking publicly for several months.
This would allow HUD to bypass the rule making process to make defined program changes in order to protect reverse mortgage borrowers as well as shore up the HECM portion of the Federal Housing Administration’s Mutual Mortgage Insurance Fund.
The next step toward the bill becoming law will be for the Senate to pass a bill with the same, or similar language.
“This is one major step down, with one more to go,” said National Reverse Mortgage Lenders Association President and CEO Peter Bell following the bill’s passage, by unanimous consent. NRMLA and other industry advocates have long worked in support of the legislation.
Changes being discussed by HUD include limitations to draw amounts by borrowers, mandatory escrows for tax and insurance payments, and financial assessments of borrowers.
The bill was co-sponsored by Reps. Michael Fitzpatrick (R-PA) and Denny Heck (D-WA). A companion bill has been introduced in the Senate by Senator Robert Menendez (D-NJ).
“These changes will improve the product for seniors and return the reverse mortgage program to profitability for the taxpayer,” Rep. Heck said in a statement.
Written by Elizabeth Ecker