Reverse Mortgage Stabilization Act of 2013

Madam Speaker, I yield myself such time as I may consume.

I would like to begin by reciprocating and thanking the gentleman from Texas for his leadership on this issue, and perhaps as notably the gentleman from Pennsylvania for his leadership and cooperation and collaboration in helping to solve this important problem. I thank you, sir. And, more importantly, I thank you on behalf of the many people who will benefit as a result of our action here today.

Madam Speaker, currently the Federal Housing Administration underwrites 100 percent of all reverse mortgages. Let me say that again. The Federal Housing Administration underwrites 100 percent of all reverse mortgages, and that is a program that is deeply troubled, as enumerated by the capable chair of the Financial Services Committee.

And so if you believe, as I do, that reverse mortgages are a financial product that actually ought to be available to some people, but under appropriate circumstances and conditions, it's all the more important that we enact H.R. 2167 today, and not just because TV pitchmen--let's see if I can name them all--James Garner, Henry ``the Fonz'' Winkler, Fred Dalton Thompson, Pat Boone, and Robert Wagner-- entreat our elderly to do so, but because this legislation is very important.

So the question is, as with all legislation: What's the problem? There's probably no better statement of the problem than is represented in this chart which says that 7 percent of the FHA's portfolio is related to reverse mortgages, but 17 percent of their portfolio that is underwater is attributable to reverse mortgages. That is a stark, salient representation of why this legislation is needed.

I might add, frankly, that if you were to compare reverse mortgages across all, just the going forward, 30-year fixed mortgage market, it would be even more stark. This is against all products.

So what's the solution? As the chair indicated, it is to give the FHA the authority through mortgagee letter to adopt certain reforms. The alternative is to wait and to endure the arduous rulemaking process.

I had an agency in the office the other day for which I had a problem, and I sought a solution through the rulemaking process. I asked them, what's the minimum amount of time that would be required for adoption of rules, and they indicated the best of circumstances would be 18 months--sighed, paused--then said more like 24 to 36 months. We can't wait that long, Madam Speaker.

So what are those reforms that are likely to be adopted via mortgagee letter at the FHA? I think most notably, it would require a financial assessment of potential borrowers to ensure that this financial product is suitable for them. There are others as well. It may reduce the amount of funds granted up front to the borrower, and it may require escrow for provision of payment of taxes and insurance, something that is not uncommon in the mortgage industry.

But the financial assessment portion that very well may ensue as a result of passage of this legislation, it's important to note that that is a tool and technique used by the VA when it underwrites reverse mortgages. Let me say that again. The VA uses this tool to underwrite reverse mortgages. And how much of a problem does the VA have with reverse mortgages? Zero. Zero.

So we know with a virtual certainty that this solution which the gentleman from Pennsylvania and I bring to you today will solve the problem.

Finally, let me just say this is a twofer. We don't often get the opportunity for a twofer. This will extend some consumer protection insofar as there are consumers who will not purchase or who will purchase under different terms and conditions this product in a way that will not render them at risk as they are today. And secondly, it will inarguably improve the portfolio of the FHA. So, ladies and gentlemen, I entreat you to vote ``yes,'' and I thank once again both the chair of the committee and the gentleman from Pennsylvania.

I reserve the balance of my time.

Madam Speaker, I yield back the balance of my time.

Madam Speaker, I move to suspend the rules and pass

the bill (H.R. 2167) to authorize the Secretary of Housing and Urban Development to establish additional requirements to improve the fiscal safety and soundness of the home equity conversion mortgage insurance program.

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 2167 currently under consideration.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in support of the bipartisan H.R. 2167, the Reverse Mortgage Stabilization Act of 2013, introduced by our colleagues, Mr. Heck of Washington and Mr. Fitzpatrick of Pennsylvania.

H.R. 2167 provides authority to the Secretary of Housing and Urban Development to make administrative and policy changes to the FHA's Home Equity Conversion Mortgage Program through a mortgagee letter rather than the arduous 18-month regulatory process. The bill sets conditions that FHA can only use this new authority when immediate changes are necessary to improve the fiscal safety and soundness of the program. And, Madam Speaker, immediate changes that improve the fiscal safety and soundness of this program are exactly what is needed.

In our efforts in this Congress and on the Financial Services Committee to help create a sustainable and competitive housing finance system for Americans, our committee and its Housing and Insurance Subcommittee have held a series of hearings this year on the financial problems at the FHA.

In its current form, FHA is most definitely an impediment to a sustainable and competitive housing finance system. Because of this, the Financial Services Committee has been working to examine needed reforms to FHA, reforms that go beyond its fiscal solvency and address serious structural flaws at the FHA.

There is one thing that we know for certain about FHA: the FHA is not just broke; regrettably, it is bailout broke. This is not just my conclusion; it is the conclusion of the annual independent actuarial study of the FHA's Mutual Mortgage Insurance Fund--the government fund that insures the FHA's single-family mortgages. This actuarial study shows us ``the economic value of the fund as of FY 2012 is negative $13.48 billion.''

The same actuarial report states that the economic value of the Home Equity Conversion Mortgage portion of the fund--which H.R. 2167 addresses--is ``negative $2.8 billion.'' Again, bailout broke.

Madam Speaker, H.R. 2167, which has strong bipartisan support, is a first and modest step in stemming substantial losses from FHA. It provides the tools needed to allow the agency to immediately address serious and significant flaws with its Home Equity Conversion Mortgage Program that threaten hardworking taxpayers with being forced to fund yet another Washington bailout.

That's why, Madam Speaker, I urge the passage of H.R. 2167 today. The Secretary of HUD has testified that HUD needs this authority from Congress to make immediate changes. As I said, without H.R. 2167, it could take up to 18 months for these vital, needed changes to be made, during which the FHA would continue to lose money.

I thank the bipartisan supporters and authors of this bill for their leadership and for their support in order to help protect taxpayers and improve and reform the FHA program.

I reserve the balance of my time.

Madam Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Fitzpatrick), the vice chair of our Oversight and Investigations Subcommittee, and the lead cosponsor of this bill.

Madam Speaker, I'm ready to close. I just simply want to thank my two colleagues for their bipartisan leadership on this bill, something that is going to be very important to sustainable housing, the fiscal sanity of the FHA, and for a number of our consumers as well. I urge the House to adopt the bill.

I yield back the balance of my time.

Madam Speaker, I rise in support of H.R. 2167, a bill that I was very happy to work on with the gentleman from Washington. It's an example of us able to work in a bipartisan way on important legislation that will, in fact, institute good, commonsense reforms on an important program for America's seniors.

This bill is very simple. It allows HUD to institute some needed reforms to the Home Equity Conversion Mortgage Program, better known as reverse mortgages, using an expedited process. The legislation requires that any changes to the program being made using the authority contained in this act must be done to improve the fiscal safety and soundness of the reverse mortgage program.

There is concern on both sides of the aisle about the financial health of FHA. Last November, FHA released its annual report to Congress on the financial status of the Mutual Mortgage Insurance Fund. There are some significant shortfalls, and the Financial Services Committee and the chairman have been diligently examining the problems there and what actions that Congress may need to take.

The Home Equity Conversion Mortgage Program is one of those areas that must be reformed, and this bill is going to help the HUD Secretary take some critical steps to ensure the long-term stability of that program.

Madam Speaker, it is important that we make improvements to FHA's HECM program to ensure that reverse mortgages remain an option for seniors. When used appropriately, a reverse mortgage can help seniors pay off debts; deal with unexpected expenses, including health emergencies; and improve or maintain quality of life.

It can be an important financial tool for folks like Robert and Fran Ciaccia of Bristol Township in my district who, because of this program, had access to equity that they used to make their lives and their retirement better--their lives, Robert and Fran, and the lives of countless seniors throughout Pennsylvania that I've spoken to who were able to maintain their home and stay in their home well into their retirement years when they had no other options to do so.

FHA insurance makes these products widely available, while protecting against predatory practices. By using the authority granted in this act, the Secretary of HUD has suggested reforms that protect taxpayers by making the HECM program more fiscally sound, while increasing consumer protections for seniors who may want to take advantage of a reverse mortgage.

So, Madam Speaker, I urge my colleagues to support the legislation. I appreciate the opportunity to work with the gentleman from Washington on this bill.

I ask unanimous consent the Banking, Housing and Urban Affairs Committee be discharged from further consideration of H.R. 2167, and the Senate proceed to its consideration.

I ask unanimous consent the bill be read a third time and passed and the motion to reconsider be laid upon the table, with no intervening action or debate.