House Passes Reverse Mortgage Stabilization Act

House Passes Reverse Mortgage Stabilization Act

WASHINGTON, D.C. – June 13, 2013 – (RealEstateRama) — In a vote of confidence for HUD and the HECM program, the U.S. House of Representatives on Wednesday passed the Reverse Mortgage Stabilization Act of 2013 (H.R. 2167) by unanimous consent.

NRMLA’s legislative team worked closely with the bill’s co-sponsors, Reps. Michael Fitzpatrick (R-PA) and Denny Heck (D-WA), to get H.R. 2167 added to the House “suspension” calendar, a short cut that allows non-controversial bills to be quickly debated and approved by voice vote.

Rep. Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee, opened floor debate by describing the bill as “bi-partisan” and urged his colleagues to support its passage.

“Reverse mortgages are an important financial tool,” said Rep. Fitzpatrick during floor debate. “It’s important that we make improvements to the HECM program to ensure reverse mortgages remain available to seniors who need them.”

Rep. Heck said passing the bill is a “twofer, which we don’t get to do very often. It’s good for the people and good for FHA.”

The changes that FHA is considering to improve the health and performance of the HECM program and Mutual Mortgage Insurance Fund – including draw limitations, mandatory escrows and financial assessments – require rulemaking, which is generally a two-year process. H.R. 2167 would allow FHA to implement these changes more quickly by mortgagee letter.

In his closing remarks, Rep. Fitzpatrick referred to Robert (age 74) and Francis Ciaccia (age 72) from his home district encompassing Bucks County, PA, “who got a reverse mortgage that enabled them to remain in their home.”

The Ciaccia’s got a loan in 2006 to pay off a mortgage and took the balance as a line of credit. Seven years later, they said the reverse mortgage has given them peace of mind they never could have imagined.

A similar bill was introduced in the Senate by Senator Robert Menendez (D-NJ). A hearing on the HECM program has been scheduled for June 18.

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