Duncan Faircloth: “I felt compelled to speak today on behalf of S. 562 which I support as a cosponsor. It is a good bill and apparently…”

“I felt compelled to speak today on behalf of S. 562 which I support as a cosponsor. It is a good bill and apparently long overdue. This legislation provides protections to homeowners who are receiving reverse mortgages by ensuring that there are no unnecessary or excessive costs charged for obtaining the mortgage. I state that this bill is apparently overdue because of the horrendous stories we have heard about the elderly being charged outrageous fees simply to find out information about the reverse mortgage program. Because the reverse mortgage program is only available to individuals over 62 years of age, these so-called scam artists are preying on older citizens who typically are cash-poor and in need of additional dollars, sometimes for health care costs or home improvements. A reverse mortgage is a loan that works backwards. It is beneficial for those who are house-rich but cash-poor. Instead of receiving a lump-sum amount that must be repaid in monthly installments, the homeowner gets to borrow money based on the equity in his home and nothing has to be repaid until the owner moves or dies. When the home is sold, the loan, along with the accrued interest, is repaid from the proceeds. Some of the estate planning companies who provide information on the reverse mortgage have been charging referral fees of up to 10 percent of the amount of the loan that is eventually taken out by the individual. The exorbitant fees being charged are outrageous.”