I
104TH CONGRESS
2D SESSION
H. R. 3897
To provide permanent authority for the insurance of home equity conversion
mortgages and promote consumer education in connection with such
mortgages, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 25, 1996
Mr. LAZIO of New York (for himself, Mr. LEACH, Mr. BEREUTER, Mr. BAKER
of Louisiana, Mr. CASTLE, Mr. WELLER, Mr. HAYWORTH, Mr. BONO,
Mr. NEY, Mr. EHRLICH, Mr. CREMEANS, Mr. FOX of Pennsylvania, Mr.
HEINEMAN, Mr. WATTS of Oklahoma, Mr. ENGLIGH of Pennsylvania, Mr.
ENSIGN, and Mr. FLANAGAN) introduced the following bill; which was re-
ferred to the Committee on Banking and Financial Services
A BILL
To provide permanent authority for the insurance of home
equity conversion mortgages and promote consumer edu-
cation in connection with such mortgages, 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 ‘‘Senior Citizens Home-
ownership Protection Act of 1996’’.
SEC. 2. PERMANENT HOME EQUITY CONVERSION MORT-
GAGE 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. PERMISSION FOR MORTGAGEE TO ARRANGE FOR
CONSUMER EDUCATION.
Section 255 of the National Housing Act is amend-
ed—
(1) in subsection (d)(2), by striking subpara-
graph (B) and inserting the following new subpara-
graph:
‘‘(B) has received adequate consumer edu-
cation by a third party as provided in sub-
section (f); and’’;
(2) in subsection (e), by striking paragraph (1)
and inserting the following new paragraph:
‘‘(1) no later than the time of the loan applica-
tion, a disclosure form developed by the Secretary
and information regarding sources of the consumer
education required in subsection (d)(2)(B);’’;
(3) in subsection (f)—
(A) by striking the first sentence and in-
serting the following new sentence: ‘‘The Sec-
retary shall provide or cause to be provided the
consumer education required in subsection
(d)(2)(B) and shall set standards for providers
of consumer education to the extent considered
necessary by the Secretary.’’; and
(B) by inserting after paragraph (5) the
following new sentence:
‘‘Nothing in this section shall prevent the mortgagee from
requiring the mortgagor to provide reasonable compensa-
tion to the party that provided the consumer education
required in subsection (d)(2)(B), including reimbursement
from proceeds of the mortgage, as long as no payment
or other thing of value is given in violation of section 8
of the Real Estate Settlement Procedures Act of 1974.’’.
SEC. 4. OTHER APPROACHES TO CONSUMER EDUCATION.
The Secretary of Housing and Urban Development
shall consult with consumer groups, industry representa-
tives, representatives of counseling organizations, and
other interested parties to identify approaches to
consumer education other than the requirements of section
255 of the National Housing Act that may be feasible and
desirable for home equity conversion mortgages insured
under section 255 and other types of reverse mortgages.
The Secretary may adopt, in lieu of the consumer edu-
cation required by section 255(f) of the National Housing
Act, alternative approaches to consumer education that
may be developed as a result of such consultations.
SEC. 5. FUNDING FOR COUNSELING AND CONSUMER EDU-
CATION AND OUTREACH.
(a) AUTHORITY
TO
USE
ASSISTED
HOUSING
AMOUNTS.—To the extent and for the purposes specified
in subsection (b), and in addition to any other amounts
available for such purposes, the Secretary of Housing and
Urban Development may use recaptured amounts initially
appropriated for the account of the Department of Hous-
ing and Urban Development known as the Annual Con-
tributions for Assisted Housing account.
(b) FISCAL YEAR 1997.—Of the amounts described
in subsection (a), up to a total of $1,000,000 shall be
available to the Secretary for fiscal year 1997, in such
amounts as the Secretary determines appropriate, for the
following purposes in connection with home equity conver-
sion mortgages insured under section 255 of the National
Housing Act:
(1) For housing counseling authorized by sec-
tion 106 of the Housing and Urban Development
Act of 1968.
(2) For transfer to the departmental salaries
and expenses account for consumer education and
outreach activities.
SEC. 6. CONFORMING AMENDMENTS.
Section 255 of the National Housing Act is amend-
ed—