Reverse Mortgage Oversight Approved for CFPA

To protect seniors for fraudulent reverse mortgage schemes, the House of Representatives approved an amendment for the proposed Consumer Financial Protection Agency to monitor and regulate the practices of reverse mortgage lenders. "Many seniors are turning to reverse mortgages," said Rep. Jan Schakowsky, D-Ill., in offering her reverse mortgage amendment during debate on the Wall Street Reform and Consumer Protection bill (H.R. 4173). "We must do everything in our power to ensure the fidelity of the system and shield our parents and grandparents from being cheated or misled," she said. As proposed, the CFPA would be an independent regulatory agency that sets mortgage lending standards for all residential originators and has the power to enforce those standards. Rep. Schakowsky's amendment gives the CFPA explicit authority to regulate reverse lending practices. The House passed her amendment by a 277-149 vote. During debate, the Illinois lawmaker noted that CFPA should work with the Federal Housing Administration, which insures a reverse mortgage product called Home Equity Conversion Mortgages, in developing its reverse mortgage regulations.