A spending bill passed this week by the House Appropriations Committee would extend a suspension on the cap placed on the number of government-insured reverse mortgages.
The cap, initially set under the Home Equity Conversion Mortgage statute in 1987 at 2,500 loans, was later revised to a count of 275,000 in 2006, according to the National Reverse Mortgage Lenders Association.
The cap has not increased since that time, but it has been suspended repeatedly, allowing for additional loans to be made and insured.
Last year, Congress debated the cap on the HECM program, but the future of the HECM cap still in question after being suspended through the current fiscal year, ending September 30.
More recently, it was brought to the attention of the Senate Banking Committee through testimony presented by NRMLA’s President and CEO Peter Bell.
The House Appropriations bill was approved by a 28-20 vote, according to NRMLA, and would extend the suspension of the cap through September 30, 2014.
Written by Elizabeth Ecker