[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2490 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2490

To prohibit authorized lenders of home equity conversion mortgages from 
requiring seniors to purchase an annuity with the proceeds of a reverse 
mortgage, and to provide other consumer protections to reverse mortgage 
                               borrowers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 14, 2007

 Mrs. McCaskill (for herself, Mr. Kohl, and Mr. Carper) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To prohibit authorized lenders of home equity conversion mortgages from 
requiring seniors to purchase an annuity with the proceeds of a reverse 
mortgage, and to provide other consumer protections to reverse mortgage 
                               borrowers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reverse Mortgage Proceeds Protection 
Act''.

SEC. 2. PROHIBITION ON REQUIRED PURCHASE OF AN ANNUITY.

    Section 255 of the National Housing Act of 1937 (12 U.S.C. 1715z-
20) is amended by--
            (1) amending subsection (d)(2)(B) to read as follows:
                    ``(B) has received adequate counseling by a third 
                party (other than a reverse mortgage lender, servicer 
                or investor, or an entity engaged in the sale of 
                annuities, investments, long-term care insurance, or 
                any other type of financial or insurance product) as 
                provided in subsection (f);'';
            (2) amending the first sentence of subsection (f) to read 
        as follows: ``The Secretary shall provide or cause to be 
        provided and paid for by entities other than a reverse mortgage 
        lender, servicer or investor, or an entity engaged in the sale 
        of annuities, investments, long-term care insurance, or any 
        other type of financial or insurance product the information 
        required in subsection (d)(2)(B).'';
            (3) striking subsection (l);
            (4) redesignating subsection (m) as subsection (l);
            (5) amending subsection (l), as so redesignated, to read as 
        follows:
    ``(l) Funding for Counseling.--The Secretary may, in his or her 
discretion, use a portion of the mortgage insurance premiums collected 
under the program under this section to adequately fund the counseling 
and disclosure activities required under subsection (f), including 
counseling for those homeowners who elect not to take out a home equity 
conversion mortgage.''; and
            (6) adding at the end the following:
    ``(m) Regulations To Protect Elderly Homeowners.--Not later than 6 
months after the date of enactment of the Reverse Mortgage Proceeds 
Protection Act, the Secretary shall, in consultation with other 
relevant Federal departments and agencies, promulgate regulations to 
help protect elderly homeowners from the marketing of financial and 
insurance products not in the interest of such homeowners, including 
the marketing or sale of an annuity as a condition of obtaining any 
home equity conversion mortgage. In developing the regulations required 
under this subsection, the Secretary shall consult with consumer 
advocates (including recognized experts in consumer protection), 
industry representatives, representatives of counseling organizations, 
and other interested parties.''.
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