Washington, DC – June 14, 2013 – (RealEstateRama) — Cong. Ileana Ros-Lehtinen (R-FL) is pleased that the House has passed the Reverse Mortgage Stabilization Act (H.R. 2167) which provides more protections for seniors using the Federal Housing Administration’s (FHA) Reverse Mortgage loan protection program.
The bi-partisan bill is also supported by the Administration and passed by a voice vote. It gives the U.S. Housing and Urban Development Department (HUD) additional authority to manage this vital seniors program which recently had losses that might require intervention by the Treasury. The changes will help manage risk to the FHA’s insurance fund as well as increase protections for reverse mortgage borrowers.
The Reverse Mortgage program is a valuable financial option for cash-poor, home equity rich seniors. It allows seniors to borrow money upfront or on monthly draws at attractive rates, without having to make ongoing principal and loan repayments. The ultimate loan repayment is made through a home sale when the senior dies or moves out of their home.
The reforms in the bill will protect senior borrowers by limiting their ability to over-borrow and to spend money for items which will not help their financial security. A tax and insurance financial assessment in the bill will help eliminate borrowers who should not take on the debt because they may have trouble meeting tax and insurance obligations
Said Ros-Lehtinen, “I am pleased that the House approved this bill with strong support from both parties and the Administration. These reforms will ensure that the Reverse Mortgage program will continue to help seniors benefit from their home ownership.”