Reverse Mortgage Legislation Update – February 4, 2010

This week was a very busy one for the federal government. Without further ado:

Ben Bernanke took quietly took his oath on Wednesday for his second term as Chairman of the Federal Reserve.  The federal budget also came out this week and while HUD was allocated more money than it requested, changes to the reverse mortgage program are still in store.

Meanwhile, recently elected Massachusetts senator Scott Brown (R-MA) is expected to be sworn in today. When he is and takes his seat, the Democrats will no longer have a super majority in the Senate.

President Barack Obama proposed two new financial regulations this week. The first would ban banks that use federal deposit insurance and the Federal Reserve discount window from making market bets using their own money. They also would be prohibited from owning hedge funds or private equity firms.  The second would seek to bar further consolidation of financial institutions by capping the future size of any firm.

Pennsylvania Congressman Joe Sestak (D-PA) introduced HR 4419, the Reverse Mortgage Elder Protection Act, which is currently in front of the House Committee on Financial Services. Rep. Sestak is also in the process of running for the Senate. The proposed Reverse Mortgage Elder Protection Act contains many of the same provisions as the recently enacted California bill, preventing an application for a reverse mortgage from being taken until the borrower has received a special cautionary statement, a checklist for the counseling session, and a referral to a HUD approved reverse mortgage counseling agency.

New state reverse mortgage legislation was also proposed in Nebraska and Arizona.

Written by Reva Minkoff

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