U.S. Sen. Robert Menendez, D-N.J., introduced legislation that would allow the Department of Housing and Urban Development to strengthen the federal reverse mortgage program.
The goal would be to update and create additional risk-assessment layers to the federal Home Equity Conversion Mortgage program.
"The Federal Housing Association is fulfilling a mission that is necessary and useful in helping older Americans remain in and maintain their homes. Aging in place is the most cost effective alternative for many households. The Home Equity Conversion Mortgage is a critical resource for helping seniors do so," said the National Reverse Mortgage Lenders Association President Peter Bell.
The changes the FHA proposed include the establishment of a financial assessment process, set-asides or escrows for taxes and insurance and restrictions on initial draws and/or utilization of funds.