[Congressional Record Volume 159, Number 83 (Wednesday, June 12, 2013)]
[House]
[Pages H3299-H3301]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               REVERSE MORTGAGE STABILIZATION ACT OF 2013

  Mr. HENSARLING. Madam Speaker, I move to suspend the rules and pass

[[Page H3300]]

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.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2167

       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 
     Stabilization Act of 2013''.

     SEC. 2. ADDITIONAL SAFETY AND SOUNDNESS REQUIREMENTS FOR HOME 
                   EQUITY CONVERSION MORTGAGE INSURANCE PROGRAM.

       Subsection (h) of section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20(h)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(3) establish, by notice or mortgagee letter, any 
     additional or alternative requirements that the Secretary, in 
     the Secretary's discretion, determines are necessary to 
     improve the fiscal safety and soundness of the program 
     authorized by this section, which requirements shall take 
     effect upon issuance.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Hensarling) and the gentleman from Washington (Mr. Heck) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. 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.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. 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.
  Mr. HECK of Washington. 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.

[[Page H3301]]

  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.
  Mr. HENSARLING. 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.

                              {time}  1240

  Mr. FITZPATRICK. 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.
  Mr. HECK of Washington. Madam Speaker, I yield back the balance of my 
time.
  Mr. HENSARLING. 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.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Hensarling) that the House suspend the rules 
and pass the bill, H.R. 2167.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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