As lawmakers continue to file debate the Restoring American Financial Stability Act of 2010 (S. 3917) amendments, Senator Claire McCaskill (D-MO) and Senator Herbert Kohl (D-Wis) have introduced S.A. 3941, an amendment that would give the proposed Consumer Finance Protection Agency the authority to establish strict rules governing the sale of reverse mortgages.
The amendment states the director shall examine the practices of covered persons in connection with any reverse mortgage transaction and shall prescribe regulations identifying any acts or practices as unlawful, unfair, deceptive, or abusive in connection with a reverse mortgage transaction or the recommendation or offering of a reverse mortgage.
The amendment is focused mainly on ensuring the terms of the reverse mortgage are disclosed properly. However, it does state that the Director should ensure there is a determination of the suitability of a reverse mortgage for a consumer, taking into consideration a range on issues including whether or not the mortgage intends to reside in the property on a long term basis.
Additionally, it would prohibit any person from advertising a reverse mortgage in a manner that is false or misleading or fails to present equally the risks and benefits or reverse mortgages or fails to reveal negative facts that are material to a representation made in such advertisement.
You can see a copy of the amendment here.
