[Congressional Record (Bound Edition), Volume 151 (2005), Part 10]
[House]
[Pages 13943-13944]
[From the U.S. Government Publishing Office, www.gpo.gov]




   URGING SUPPORT FOR H.R. 2892, REVERSE MORTGAGES TO HELP AMERICA'S 
                              SENIORS ACT

  The SPEAKER pro tempore (Mr. McHenry). Under a previous order of the 
House, the gentleman from Pennsylvania (Mr. Fitzpatrick) is recognized 
for 5 minutes.

[[Page 13944]]


  Mr. FITZPATRICK of Pennsylvania. Mr. Speaker, as we continue to 
discuss the best ways to strengthen retirement security for our 
Nation's seniors, I have looked into numerous programs to lessen the 
burden that our seniors face in rising health care costs, 
transportation, and homeownership.
  As a long-time Bucks County Commissioner and now as a Member of 
Congress, I have received many phone calls, many letters from seniors 
looking to find ways to stay in their homes and pay their bills. How 
many seniors do the Members know who are struggling financially because 
they do not have a steady income stream coming in, but are sitting on a 
valuable asset that is not working for them, an asset that they cannot 
cash in: the home that they want to stay in for their retirement?
  Last week, Mr. Speaker, I introduced H.R. 2892. This legislation is 
bipartisan and is endorsed by AARP. It will eliminate the volume cap on 
the Department of Housing and Urban Development's Home Equity 
Conversion Mortgage, commonly referred to as the FHA-insured reverse 
mortgage program. A reverse mortgage is a unique loan that enables 
senior homeowners to remain in their homes and be financially 
independent by converting part of the equity in their homes into tax-
free income without having to sell the home, does not require them to 
give up title, or to take on new mortgage payments. The funds from a 
reverse mortgage can be used for needs that every senior faces like 
health care costs, prescription drug costs, in-home care, prevention of 
foreclosure, paying off existing debts, home repairs, modification, or 
simple daily living expenses.
  Reverse mortgages are aptly named because the payment stream is 
reversed. Instead of making monthly payments to the lender, as with a 
regular mortgage, the lender makes payments to the senior homeowner. 
This unique loan enables senior homeowners who are house rich but cash 
poor to convert part of their equity in their homes into tax-free 
income and allow the homeowner great flexibility in choosing how to 
receive the money. They can opt to receive a lump sum, fixed monthly 
payments, a line of credit, or a combination of the three. No monthly 
payments are required during the term of the loan, and it is paid back 
only when the resident sells the home, passes away, or has permanently 
moved out of the home.
  A key part of the reverse mortgage program is mandatory counseling. 
To make sure that no one rushes into a mortgage that they are 
unprepared for, the program requires mandatory counseling prior to 
applying for a reverse mortgage to ensure that the homeowner has a plan 
to use the payments in a responsible and beneficial manner. The reverse 
mortgage program has been successful and popular with senior 
homeowners, so much so that the rapid growth in these mortgages created 
a near crisis this April when concerns arose that the cap was going to 
be reached, leading to a suspension of the program.
  While the cap was raised from 150,000 to 250,000 in the 2005 
emergency supplemental appropriation bill, this is just a temporary 
solution. AARP stated that the only complete removal of the volume cap, 
which is my bill, H.R. 2892, will prevent the possibility of future 
program disruptions that will be detrimental to seniors.
  The importance of sustaining the FHA reverse mortgage program was 
further emphasized to me this past Monday while I was visiting in my 
district in Pennsylvania with several senior homeowners who recently 
obtained reverse mortgages.
  Their stories are the same. They have worked their whole lives to 
obtain this home and to pay for the home. They have raised their 
children in the home. They have retired into their homes, and they live 
on Social Security income with basically no remaining savings. They 
have converted the equity in their home so that they can repair their 
homes, they can increase their standard of living, and they can live 
out their senior years with dignity in their own home.
  Mr. Speaker, I think every Member of Congress can agree that seniors 
must have the option to stay in their homes as long as they wish. 
Lifelong homeownership is the American Dream. My legislation, H.R. 
2892, would provide relief for those seniors faced with losing their 
homes. As we celebrate National Homeownership Month, it is fitting that 
Congress enact legislation that will allow existing homeowners to 
remain homeowners.
  Today I call on all of my colleagues on both sides of the aisle to 
join me in this vital effort and to co-sponsor H.R. 2892.

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