House Passes Reverse Mortgage Stabilization Bill

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.

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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

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  • We still have the senate to get by. That may be easier said than done.

    What the house did was a good thing and a step in the right direction. Now time will tell the rest of the story.

    John A. Smaldone

  • Now that the bill is in play, how many amendments will it be loaded with? How many differences will there be between the House and Senate versions of the passed bills (assuming the Senate passes its version)? Will a lack of Congressional voting consensus on different bills as happened with the FHA portion of HERA, delay passage for almost two years?

    The longer the bill takes to get through the Senate, the more likely we are to see amendments piling on, which have absolutely nothing to do with FHA.

  • With the memories of the FHA portion of HERA, one has to wonder what will happen to this bill. It took two years to get Congress to resolve their minor and previously agreed to changes before the final bill was enacted. Who knows what will happen to this one.

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