[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[Senate]
[Pages S12428-S12430]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SENIOR CITIZEN HOME EQUITY PROTECTION ACT

  Mr. SESSIONS. President, I ask the Chair lay before the Senate a 
message from the House of Representatives on (S. 562) to amend section 
255 of the National Housing Act of to prevent the funding of 
unnecessary or excessive costs for obtaining a home equity conversion 
mortgage.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the bill from the Senate (S. 562) entitled 
     ``An Act to amend section 255 of the National Housing Act to 
     prevent the funding of unnecessary or excessive costs for 
     obtaining a home equity conversion mortgage.'', do pass with 
     the following amendments:
Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Housing Programs Extension 
     Act of 1997''.
             TITLE I--SENIOR CITIZEN HOME EQUITY PROTECTION

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Senior Citizen Home Equity 
     Protection Act''.

     SEC. 102. DISCLOSURE REQUIREMENTS; PROHIBITION OF FUNDING OF 
                   UNNECESSARY OR EXCESSIVE COSTS.

       Section 255(d) of the National Housing Act (12 U.S.C. 
     1715z-20(d)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (C) by inserting after subparagraph (B) the following:
       ``(C) has received full disclosure of all costs to the 
     mortgagor for obtaining the mortgage, including any costs of 
     estate planning, financial advice, or other related services; 
     and'';
       (2) in paragraph (9)(F), by striking ``and'';
       (3) in paragraph (10), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(11) have been made with such restrictions as the 
     Secretary determines to be appropriate to ensure that the 
     mortgagor does not fund any unnecessary or excessive costs 
     for obtaining the mortgage, including any costs of estate 
     planning, financial advice, or other related services.''.

     SEC. 103. IMPLEMENTATION.

       (a) Notice.--The Secretary of Housing and Urban Development 
     shall, by interim notice, implement the amendments made by 
     section 102 in an expeditious manner, as determined by the 
     Secretary. Such notice shall not be effective after the date 
     of the effectiveness of the final regulations issued under 
     subsection (b).
       (b) Regulations.--The Secretary shall, not later than the 
     expiration of the 90-day period beginning on the date of the 
     enactment of this Act, issue final regulations to implement 
     the amendments made by section 102. Such regulations shall be 
     issued only after notice and opportunity for public comment 
     pursuant to the provisions of section 553 of title 5, United 
     States Code (notwithstanding subsections (a)(2) and (b)(B) of 
     such section).
 TITLE II--TEMPORARY EXTENSION OF PUBLIC HOUSING AND SECTION 8 RENTAL 
                         ASSISTANCE PROVISIONS

     SEC. 201. PUBLIC HOUSING CEILING RENTS AND INCOME ADJUSTMENTS 
                   AND PREFERENCES FOR ASSISTED HOUSING.

       Section 402(f) of The Balanced Budget Downpayment Act, I 
     (42 U.S.C. 1437aa note) is amended by striking ``and 1997'' 
     and inserting ``, 1997, and 1998''.

     SEC. 202. PUBLIC HOUSING DEMOLITION AND DISPOSITION.

       Section 1002(d) of the Emergency Supplemental 
     Appropriations for Additional Disaster Assistance, for Anti-
     terrorism Initiatives, for Assistance in the Recovery from 
     the Tragedy that Occurred at Oklahoma City, and Rescissions 
     Act, 1995 (42 U.S.C. 1437c note) is amended by striking 
     ``September 30, 1997'' and inserting ``September 30, 1998''.

     SEC. 203. PUBLIC HOUSING FUNDING FLEXIBILITY AND MIXED-
                   FINANCE DEVELOPMENTS.

       Section 201(a)(2) of the Departments of Veterans Affairs 
     and Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1996 (as contained in section 101(e) of 
     the Omnibus Consolidated Rescissions and Appropriations Act 
     of 1996 (Public Law 104-134)) (42 U.S.C. 1437l note) is 
     amended by striking ``fiscal year 1997'' and inserting 
     ``fiscal year 1998''.

     SEC. 204. MINIMUM RENTS.

       Section 402(a) of The Balanced Budget Downpayment Act, I 
     (Public Law 104-99; 110 Stat. 40) is amended in the matter 
     preceding paragraph (1) by striking ``fiscal year 1997'' and 
     inserting ``fiscal years 1997 and 1998''.

     SEC. 205. PROVISIONS RELATING TO SECTION 8 RENTAL ASSISTANCE 
                   PROGRAM.

       (a) Take-One-Take-All, Notice Requirements, and Endless 
     Lease Provisions.--Section 203(d) of the Departments of 
     Veterans Affairs and Housing and Urban Development, and 
     Independent Agencies Appropriations Act, 1996 (as contained 
     in section 101(e) of the Omnibus Consolidated Rescissions and 
     Appropriations Act of 1996 (Public Law 104-134)) (42 U.S.C. 
     1437f note) is amended by striking ``and 1997'' and inserting 
     ``, 1997, and 1998''.
       (b) Fair Market Rentals.--The first sentence of section 
     403(a) of The Balanced Budget Downpayment Act, I (Public Law 
     104-99; 110 Stat. 43) is amended by striking ``fiscal year 
     1997'' and inserting ``fiscal years 1997 and 1998''.
  TITLE III--REAUTHORIZATION OF FEDERALLY ASSISTED MULTIFAMILY RENTAL 
                           HOUSING PROVISIONS

     SEC. 301. MULTIFAMILY HOUSING FINANCE PILOT PROGRAMS.

       Section 542 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 1707 note) is amended--
       (1) in subsection (b)(5), by inserting before the period at 
     the end of the first sentence the following: ``, and not more 
     than an additional 15,000 units during fiscal year 1998''; 
     and
       (2) in the first sentence of subsection (c)(4)--
       (A) by striking ``and'' and inserting a comma; and
       (B) by inserting before the period at the end the 
     following: ``, and not more than an additional 15,000 units 
     during fiscal year 1998''.

     SEC. 302. HUD DISPOSITION OF MULTIFAMILY HOUSING.

       Section 204 of the Departments of Veterans Affairs and 
     Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1997 (12 U.S.C. 1715z-11a) is amended by 
     inserting after ``owned by the Secretary'' the following: ``, 
     including the provision of grants and loans from the General 
     Insurance Fund for the necessary costs of rehabilitation or 
     demolition,''.

     SEC. 303. MULTIFAMILY MORTGAGE AUCTIONS.

       Section 221(g)(4)(C) of the National Housing Act (12 U.S.C. 
     1715l(g)(4)(C)) is amended--
       (1) in the first sentence of clause (viii), by striking 
     ``September 30, 1996'' and inserting ``December 31, 2005''; 
     and
       (2) by adding at the end the following new clauses:
       ``(ix) Subject to the limitation in clause (x), the costs 
     of any multifamily auctions under this subparagraph occurring 
     during any fiscal year shall be paid from amounts in the 
     General Insurance Fund established under section 519.
       ``(x) This authority of the Secretary to conduct 
     multifamily auctions under this subparagraph shall be 
     effective for any fiscal year only to the extent or in such 
     amounts that amounts in the General Insurance Fund are or 
     have been approved in appropriation Acts for costs of such 
     auctions occurring during such fiscal year.''.

     SEC. 304. INTEREST REDUCTION PAYMENTS IN CONNECTION WITH 
                   SALES OF SECTION 236 MORTGAGES HELD BY HUD.

       Section 236 of the National Housing Act (12 U.S.C. 1715z-1) 
     is amended--
       (1) in the first sentence of subsection (b), by inserting 
     before the colon at the end of the first proviso the 
     following: ``and when the mortgage is assigned or otherwise 
     transferred to a subsequent holder or purchaser (including 
     any successors and assignees)''; and
       (2) in subsection (c)--
       (A) by inserting ``(1)'' after the subsection designation; 
     and
       (B) by adding at the end the following new paragraphs:
       ``(2)(A) The Secretary may continue to make interest 
     reduction payments to the holder or purchaser (including any 
     successors and assignees) of a mortgage formerly held by the 
     Secretary upon such terms and conditions as the Secretary may 
     determine. In exercising the authority under the preceding 
     sentence, upon cancellation of any contract for such interest 
     reduction payments as a result of foreclosure or transfer of 
     a deed in lieu of foreclosure, any

[[Page S12429]]

     amounts of budget authority which would have been available 
     for such contract, absent cancellation, shall remain 
     available for the project for the balance of the term of the 
     original mortgage upon such terms and conditions as the 
     Secretary may determine.
       ``(B) The Secretary may exercise the authority to make 
     payments under this paragraph (i) only with respect to 
     mortgage loans under this section which, at the time of the 
     Secretary's assignment or other transfer, have a total amount 
     of unpaid principal obligation of not more than $92,000,000, 
     and (ii) only to the extent or in such amounts as are or have 
     been provided in advance in appropriation Acts.
       ``(3) Notwithstanding subsection (i)(2) or any other 
     provision of law, in connection with the sale of mortgages 
     held by the Secretary, the Secretary may establish 
     appropriate terms and conditions, based on section 42 of the 
     Internal Revenue Code of 1986 or another appropriate 
     standard, for determining eligibility for occupancy in the 
     project and rental charges.''.

     SEC. 305. ASSIGNMENT OF REGULATORY AGREEMENTS IN CONNECTION 
                   WITH SALES OF MORTGAGES HELD BY HUD.

       Section 203(k) of the Housing and Community Development 
     Amendments of 1978 (12 U.S.C. 1701z-11(k)) is amended by 
     adding at the end the following new paragraph:
       ``(7) Assignment of regulatory agreement in connection with 
     sale of mortgages.--Notwithstanding any other provision of 
     law, and upon such terms and conditions as the Secretary may 
     prescribe, the Secretary may, in connection with the sale of 
     mortgages held by the Secretary, provide for the assumption 
     of all rights and responsibilities under the regulatory 
     agreement executed by or for the benefit of the Secretary. 
     Such assumption shall further provide for the regulatory 
     agreement to be so assumed by any successor or assignee of 
     the initial assuming entity. Such regulatory agreement shall 
     continue to be binding upon the mortgagor and its successors 
     and assignees.''.
          TITLE IV--REAUTHORIZATION OF RURAL HOUSING PROGRAMS

     SEC. 401. HOUSING IN UNDERSERVED AREAS PROGRAM.

       The first sentence of section 509(f)(4)(A) of the Housing 
     Act of 1949 (42 U.S.C. 1479(f)(4)(A)) is amended by striking 
     ``fiscal year 1997'' and inserting ``fiscal years 1997, 1998, 
     and 1999''.

     SEC. 402. HOUSING AND RELATED FACILITIES FOR ELDERLY PERSONS 
                   AND FAMILIES AND OTHER LOW-INCOME PERSONS AND 
                   FAMILIES.

       (a) Authority To Make Loans.--Section 515(b)(4) of the 
     Housing Act of 1949 (42 U.S.C. 1485(b)(4)) is amended by 
     striking ``September 30, 1997'' and inserting ``September 30, 
     1999''.
       (b) Set-Aside for Nonprofit Entities.--The first sentence 
     of section 515(w)(1) of the Housing Act of 1949 (42 U.S.C. 
     1485(w)(1)) is amended by striking ``fiscal year 1997'' and 
     inserting ``fiscal years 1997, 1998, and 1999''.

     SEC. 403. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN 
                   RURAL AREAS.

       Section 538 of the Housing Act of 1949 (42 U.S.C. 1490p-2) 
     is amended--
       (1) in subsection (q), by striking paragraph (2) and 
     inserting the following:
       ``(2) Annual limitation on amount of loan guarantee.--In 
     each fiscal year, the Secretary may enter into commitments to 
     guarantee loans under this section only to the extent that 
     the costs of the guarantees entered into in such fiscal year 
     do not exceed such amount as may be provided in appropriation 
     Acts for such fiscal year.'';
       (2) by striking subsection (t) and inserting the following:
       ``(t) Authorization of Appropriations.--There are 
     authorized to be appropriated for each of fiscal years 1998 
     and 1999 for costs (as such term is defined in section 502 of 
     the Congressional Budget Act of 1974) of loan guarantees made 
     under this section such sums as may be necessary for such 
     fiscal year.''; and
       (3) in subsection (u), by striking ``1996'' and inserting 
     ``1999''.
      TITLE V--REAUTHORIZATION OF NATIONAL FLOOD INSURANCE PROGRAM

     SEC. 501. PROGRAM EXPIRATION.

       Section 1319 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4026) is amended by striking ``September 30, 
     1997'' and inserting ``September 30, 1999''.

     SEC. 502. BORROWING AUTHORITY.

       Section 1309(a)(2) of the National Flood Insurance Act of 
     1968 (42 U.S.C. 4016(a)(2)) is amended by striking 
     ``September 30, 1997'' and inserting ``September 30, 1999''.

     SEC. 503. EMERGENCY IMPLEMENTATION OF PROGRAM.

       Section 1336(a) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4056(a)) is amended by striking ``September 30, 
     1996'' and inserting ``September 30, 1999''.

     SEC. 504. AUTHORIZATION OF APPROPRIATIONS FOR STUDIES.

       Subsection (c) of section 1376 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4127(c)) is amended to read 
     as follows:
       ``(c) For studies under this title, there are authorized to 
     be appropriated such sums as may be necessary for each of 
     fiscal years 1998 and 1999, which shall remain available 
     until expended.''.

       Amend the title so as to read: ``An Act to provide for the 
     temporary extension of certain programs relating to public 
     housing, to reauthorize certain programs relating to housing 
     assistance, and to amend section 255 of the National Housing 
     Act to prevent the funding of unnecessary or excessive costs 
     for obtaining a home equity conversion mortgage, and for 
     other purposes.''.


                           Amendment No. 1630

  Mr. SESSIONS. Mr. President, I move that the Senate concur in the 
amendments of the House with a further amendment which is at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Alabama [Mr. Sessions], for Mr. D'Amato, 
     proposes an amendment numbered 1630.

  Mr. SESSIONS. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. D'AMATO. Mr. President, I rise to support immediate passage of 
the ``Senior Citizen Home Equity Protection Act'' (S. 562). This 
legislation contains essential provisions which are urgently required 
to protect our senior citizens from further exploitation by fraudulent 
operators who are manipulating the Department of Housing and Urban 
Development's (HUD) home equity conversion mortgage program. The bill 
also contains a number of housing and flood insurance program 
reauthorizations and technical corrections which are needed to ensure 
the effective and efficient continuation of existing programs.
  The Senior Citizen Home Equity Protection Act, which I introduced on 
April 10, 1997, was originally passed by the Senate on April 25, 1997. 
It seeks to prevent unscrupulous middlemen, posing as ``estate 
planners'', from taking advantage of seniors by charging unnecessary 
and excessive fees to assist them in obtaining a home equity conversion 
mortgage. These predators have charged elderly homeowners fees ranging 
from 6 to 12 percent of the loan amount. Hundreds of very low-income 
seniors have been manipulated into paying several thousand dollars in 
return for ministerial and often meaningless services. HUD provides 
information on reverse mortgages at no charge.
  These abuses must be halted at once. This bill provides two important 
safeguards to stop such exploitation. First, it provides a requirement 
that the mortgagor has received a full disclosure of all costs of 
obtaining the mortgage, including any costs of estate planning, 
financial advice or other related services. Second, it clarifies that 
the HUD Secretary has authority to impose restrictions to ensure that 
the mortgagor is not charged any unnecessary or excessive costs for 
obtaining a reverse mortgage.
  This legislation also provides temporary extensions of certain public 
and assisted housing policy reforms which have been previously extended 
in VA-HUD appropriations legislation since Fiscal Year 1996. An owner's 
right to prepay a Federal Housing Administration-insured multifamily 
mortgage, subject to certain conditions, is clarified.
  The bill reauthorizes several federally assisted multifamily rental 
housing programs under the jurisdiction of HUD and the Rural Housing 
Service of the Department of Agriculture. Such extensions will assure 
that much needed rental programs for low-income families continue in an 
uninterrupted fashion. The National Flood Insurance Program, which is 
vital for our homeowners residing in floodplain and coastal areas, is 
also reauthorized.
  Last fall, Congress passed the Native American Housing Assistance and 
Self-Determination Act of 1996. The legislation presented before you 
today makes technical and conforming changes to ensure the effective 
implementation of that Act.
  I would like to commend Senator Connie Mack, Chairman of the Banking 
Committee's Subcommittee on Housing Opportunity and Community 
Development, for his leadership in the development of this legislation. 
I applaud Senator Mack, Ranking Minority Member Paul Sarbanes and 
Subcommittee Ranking Minority Member John Kerry for their fine 
stewardship of housing and community development programs under the 
Banking Committee's jurisdiction.
  Mr. President, S. 562 should be law by now. By delaying action on the 
bill for 5 months, the House of Representatives has left our senior 
citizens unprotected and vulnerable to predatory practices--and for no 
reason other than to engage in parliamentary gamesmanship. Mr. 
President, I cannot condone this delay.

[[Page S12430]]

 I urge the House of Representatives to pass this bill, which now 
contains additional provisions the House has insisted upon. There is no 
opposition to this bill to my knowledge.
  I respectfully urge the Senate and the House of Representatives to 
grant passage of this bill before adjournment. It is imperative that we 
ensure that our nation's most vulnerable homeowners are no longer 
victimized. Without final passage of this bill, our very low-income 
elderly homeowners may continue to be preyed upon. I ask for immediate 
support of this vital legislation.
  The PRESIDING OFFICER. The question is on agreeing to the motion.
  The motion was agreed to.

                          ____________________