I
105TH CONGRESS
1ST SESSION
H. R. 1474
To amend section 255 of the National Housing Act to prohibit the charging
of unreasonable and excessive fees in connection with equity conversion
mortgages for elderly homeowners, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 29, 1997
Mr. BROWN of California (for himself, Mr. FILNER, Ms. LOFGREN, Mr. DEL-
LUMS, Mr. TORRES, and Mr. CAPPS) introduced the following bill; which
was referred to the Committee on Banking and Financial Services
A BILL
To amend section 255 of the National Housing Act to pro-
hibit the charging of unreasonable and excessive fees
in connection with equity conversion mortgages for elder-
ly homeowners, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘HUD Reverse Mort-
gage Program Protection Act’’.
SEC. 2. PERMANENT MORTGAGE INSURANCE AUTHORITY.
Section 255(g) of the National Housing Act (12
U.S.C. 1715z–20(g)) is amended by striking the first 2
sentences.
SEC. 3. DISCLOSURE REQUIREMENTS; PROHIBITION OF UN-
REASONABLE AND EXCESSIVE FEES FOR RE-
FERRAL SERVICES.
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 subject to such require-
ments as the Secretary shall establish to ensure, as
the Secretary determines appropriate, that the mort-
gagor is not charged unreasonable or excessive fees
(as determined by the Secretary) for referrals in
connection with obtaining the mortgage (including
referrals relating to repairs, inspections, financial
services, estate planning, insurance, title assistance,
and other related services).’’.
SEC. 4. CONSUMER EDUCATION.
Section 255(f) of the National Housing Act (12
U.S.C. 1715z–20(f)) is amended—
(1) in the subsection heading, by striking ‘‘IN-
FORMATION SERVICES FOR MORTGAGORS’’ and in-
serting ‘‘CONSUMER
EDUCATION
AND
INFORMA-
TION’’; and
(2) by adding at the end the following:
‘‘The Secretary shall carry out such actions and establish
such requirements as the Secretary considers appropriate
(A) to ensure that mortgagors under mortgages insured
under this section receive adequate consumer education,
including the counseling required under subsection
(d)(2)(B) and education regarding the requirements es-
tablished pursuant to subsection (d)(11), (B) to ensure
that such consumer education is made generally available
to elderly homeowners interested in mortgages insured
under this section, and (C) to increase public access to
entities approved by the Secretary that provide counseling
regarding mortgages insured under this section and refer-
rals to lenders for such mortgages.’’.
SEC. 5. IMPLEMENTATION.
(a) NOTICE.—The Secretary of Housing and Urban
Development shall, by interim notice, implement the
amendments made by this Act in an expeditious manner,
as determined by the Secretary. Such notice shall not be
effective after the date of the effectiveness of the final reg-
ulations 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 this Act. Such reg-
ulations 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 sub-
sections (a)(2) and (b)(B) of such section).
Æ