The National Reverse Mortgage Lenders Association spoke today in support pending legislation in the Senate that would grant the Department of Housing and Urban Development the authority it needs to make swift changes to its reverse mortgage program.
Citing its responsible approach to governing the program, NRMLA applauded the Senate’s efforts toward allowing HUD to implement change.
“The HUD proposal is a model for responsive and responsible governing,” said Peter Bell, president and CEO of NRMLA. “No government program works perfectly from the outset. HUD has carefully observed the results of the 780,000 HECM loans thus far and suggested creative improvements based on the actual experiences of borrowers.”
The changes under consideration by HUD include a financial assessment of reverse mortgage borrowers; mandatory set-aside of funds for tax and insurance payments; restrictions on the amount of proceeds that can be drawn initially; and including all borrower spouses on loans, to eliminate risk faced by non-borrowing spouses.
Several pieces of legislation have been introduced this year in both houses including The Reverse Mortgage Stabilization Act in June, sponsored by Congressmen Denny Heck (D-Wash.) and Michael Fitzpatrick (R-Pa.); S.469 in March, introduced by Senators Robert Menendez (D-N.J.) and Kirsten Gillibrand (D-N.Y.) to stabilize the Home Equity Conversion Mortgage program; and most recently the Federal Housing Administration Solvency Act of 2013, introduced on July 15 by Senators Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho), which grants HUD greater authority to manage the program.
“All of these changes consider both the best interests of borrowers and the ongoing health of the government insurance fund,” Bell said, of the considerations by HUD. “Historically, HUD has made smart changes to improve the HECM program, strengthen the insurance fund, and fulfill its mission of helping aging Americans maintain and remain in their homes. Aging in place is a cost effective choice for many households. HECM is a critical source for helping them do so.”
Written by Elizabeth Ecker