John Sarbanes: “I strongly support the Senior Citizens Home Equity Protection Act and commend Chairman D'Amato and Secretary Cuomo for…”

“I strongly support the Senior Citizens Home Equity Protection Act and commend Chairman D'Amato and Secretary Cuomo for identifying this problem and moving so quickly to develop a solution. The act will give HUD the tools it needs to put an end to the unethical practice of charging senior homeowners what has amounted to millions of dollars for information which HUD provides for free on the Home Equity Conversion Mortgage Program. The Home Equity Conversion Mortgage Program enables seniors, who have built up equity in their home, to borrow that equity to meet medical costs, make repairs on their homes, or meet their daily living expenses. Working with participating lenders, FHA insures this loan, smoothing the way to complete the transaction. Homeowners receive payments from lenders on a monthly basis, in a lump sum, or as a line of credit. The size of the loan depends on the owner's age, the interest rate, and home's value, but the average size of the loan is $42,465. Lenders recover their loan plus interest from the sale of the home when the owner dies or moves. Typically, the seniors that use this program depend largely on social security, perhaps supplemented by a very modest pension. For them, this program provides an invaluable service.”