Members of the Senate Transportation, Housing and Urban Development Subcommittee fired off questions during a hearing on Tuesday to a top housing official, demanding to know why improvements to the reserve mortgage program are being delayed.

Commissioner Carol Galante of the Federal Housing Administration defended the agency’s efforts, stating that guidance has been implemented in regards to the Home Equity Conversion Mortgage program for seniors, and proposals are being created.

Furthermore, the commissioner told members of the subcommittee that she expects a revised HECM program proposal to be completed and in the hands of Congress between July and August.

However, members were confused as to why the housing agency has delayed the proposal or any type of advancements to the program.

"I would encourage you that if you have the answer to something to not wait. Start the rulemaking. You may be able to short circuit through legislation, but don’t wait if you have a current solution," urged Sen. Susan Collins, R-ME. 

The recent crisis has exposed flaws in the HECM progra, consequently causing regulators, taxpayers and borrowers multiple headaches.

To put it into perspective, if the HECM program was eliminated, the FHA’s Mutual Mortgage Insurance fund would hold a positive balance compared to a potential $943 million loss, Galante stated.

HECM loans are suffering due to a multitude of issues, including seniors' longevity exceeding the underwriting that was put in place when mapping out the life of the loans.

As a result, the FHA is proposing three timely initiatives to better assist seniors using the HECM program.

The agency would like to use mortgagee letters to make immediate changes on principal accounts, require a financial assessment of borrowers, monitor their ability to set aside funds for taxes and provide non-borrower spouses with the same amount of protection under the HECM program, the commissioner noted.

While Galante admitted that she cannot be certain if the FHA will have to issue a first-time Treasury draw to ease the weight of the MMI fund, she is confident that with forthcoming initiatives, such as reforming the HECM program, the agency will put in its best efforts.