II 110th CONGRESS 1st Session S. 2490 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.

1.

Short title

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

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. .