Reverse Mortgage Legislation Update – January 21, 2010

Senator Chris Dodd (D-CT) and President Obama met face-to-face on Tuesday. Reports suggest that Dodd may drop the proposed Consumer Financial Protection Agency from the emerging Senate Financial Services Bill, in order to gain the support of some Republicans and centrist Democrats. One administration official said the President’s position in favor of the inclusion of the Consumer Financial Protection Agency in the bill is, “nonnegotiable.”

President Obama proposed a new tax on the nation’s biggest banks to pay for the financial bailout. Several leading reverse mortgage lenders, such as Bank of America, MetLife, and Wells Fargo, are included in this category.

The Federal Housing Authority (FHA) announced a series of sweeping changes on Wednesday to help the agency restore its financial reserves and reduce its risk.

HUD announced this week that it is expanding a temporary policy to help borrowers access FHA mortgage insurance and allow for the quick resale of foreclosed homes. HECMs are specifically exempted.

With the victory of Scott Brown (R-MA) in the special election to fill the late Senator Ted Kennedy’s seat, the Democrats have lost their 2/3 majority in the Senate, enough to overcome any vetoes.

Brown’s victory also concerns Democrats who are worried that their party will suffer heavy losses in the midterm elections this fall.

President Obama’s State of the Union address is planned for January 27, 2010.

Write to Reva Minkoff

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