[Congressional Record Volume 143, Number 51 (Friday, April 25, 1997)]
[Senate]
[Pages S3721-S3722]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE SENIOR CITIZEN HOME EQUITY PROTECTION ACT

  Mr. REED. I would like, if I may, to talk about Senate bill 562. I am 
pleased the Senate took favorable action today. This legislation, the 
Senior Citizen's Home Equity Protection Act, would protect seniors from 
unscrupulous market activities of a very small group of business 
people. We have, throughout the United States and through the auspices 
of HUD, introduced a program called the reverse mortgage program. This 
allows seniors who have their house mortgage paid off, they have all 
the equity in the home, rather than selling the home to confront the 
costs of being a senior, they are allowed through this program to 
essentially go to the bank and have a monthly or a lump sum payment in 
lieu of the equity in their home. This allows many seniors to stay in 
their homes. It allows them to meet the needs of health care and all 
the pressing needs of seniors.

  What has happened though is that a group of unscrupulous operators 
have come in, under the guise of estate planning, and now are charging 
exorbitant fees to inform seniors of this reverse mortgage program, 
sometimes collecting up to $10,000. What is particularly alarming, 
indeed, and particularly reprehensible is the fact that all of this 
information is absolutely free from the HUD office in their locality.
  So what this legislation proposes to do--I am so pleased it was 
favorably responded to this morning--is to give HUD the authority to 
step in with very, very stern measures to preempt these practices, to 
move these unscrupulous operators out of the marketplace, and allow 
seniors to reap the full benefit of the reverse mortgage program.
  In my State of Rhode Island, over 500 seniors have taken advantage of 
the reverse mortgage program. In fact, we had our State program in 
place before the Federal program was initiated. Much of the effort at 
the Federal level has been led by the Assistant Secretary for Housing, 
Nick Retsinas, who is a Rhode Islander and who in fact was a leader in 
Rhode Island for this program. So we in Rhode Island understand very 
well the effect and the efficacy of this program.
  Our Rhode Island Housing and Mortgage Finance Corporation, RIHMFC, 
has done a remarkable job promoting these programs and also a 
remarkable job of policing these programs because we have not seen any 
evidence in Rhode Island of these scandals. However, throughout the 
country, as I indicated before, these unscrupulous operators have tried 
to move in and take advantage of very vulnerable seniors.
  We know so many seniors are house rich but cash poor. They have 
equity in their home but do not have the means to make ends meet each 
week. This reverse mortgage program should help them. It should not be 
an opportunity to be taken upon or set upon by unscrupulous operators.

[[Page S3722]]

  In Rhode Island, for example, the Providence Journal reported a 
typical story, that of George Tarbox and his wife. Mr. Tarbox and his 
wife were the perennial house rich and cash poor family. They purchased 
their home in 1958. They paid off the mortgage, but they were facing 
very difficult circumstances. They were on a fixed income, like most 
seniors. And they needed the resources to simply live. The choice 
between eating and buying medicine is very difficult. The reverse 
mortgage program allowed them to meet their needs. They were able to 
pay off their original mortgage. They were able to make their daily 
expenses. They were able to get the proceeds and resources that they 
needed to live. And this is just a typical story, a very, very good 
typical story of the effectiveness of the reverse mortgage program.
  Today, with action on S. 562, we are sending a very strong message 
out to those unscrupulous operators who might try to prey on seniors 
that we are going to take a tough, tough hard stand. This program is 
there. It is for seniors. It is not for speculators. It is for seniors. 
It is not for those who prey on seniors. And it allows seniors to have 
access, through their home, to the resources they need to lead lives of 
decency and dignity.
  I am so pleased with Senator D'Amato and Senator Mack for their 
leadership on this, and for my colleagues who joined in sponsoring this 
legislation. I hope that it will move quickly through the Congress, the 
President will sign it, and we will give HUD the tools that it needs to 
eradicate this detestable practice, and allow the seniors of America to 
fully enjoy what they have worked so hard for, their homes and the 
proceeds of their homes.
  Thank you very much, Mr. President.
  I yield back the balance of my time.
  The PRESIDING OFFICER. Does the Senator suggest the absence of a 
quorum?
  Mr. REED. Mr. President, I do suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SMITH of New Hampshire. Mr. President, I ask unanimous consent 
that the order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Hutchinson). Without objection, it is so 
ordered.
  The Senator from New Hampshire is recognized for 30 minutes.
  Mr. SMITH of New Hampshire. Mr. President, it is not my intention to 
use the full 30 minutes, I say to any colleague who may be waiting or 
intending to speak.

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