H.R. 2167: Reverse Mortgage Stabilization Act of 2013

H.R. 2167

Reverse Mortgage Stabilization Act of 2013

Sen. Bernard Sanders

June 12, 2013 (113th Congress, 1st Session)

Staff Contact

Floor Situation

On Wednesday, June 12, 2013, the House will consider H.R. 2167, the Reverse Mortgage Stabilization Act of 2013,under a suspension of the rules. The bill was introduced on May 23, 2013 by Rep. Denny Heck (D-WA) and referred to the Committee on Financial Services.

Bill Summary

H.R. 2167 provides authority to the Secretary of Housing and Urban Development (HUD) to make administrative and policy changes to the Federal Housing Administration’s (FHA) home equity conversion mortgage (HECM) program through a mortgagee letter—a HUD letter to the public and stakeholders rather than the formal regulatory process—when immediate changes are necessary to improve the fiscal safety and soundness of the program. 


The FHA insures a number of different mortgages, including so-called “reverse mortgages,” which allow seniors to obtain additional income by borrowing against the equity in their homes.[1]  Under the program, a borrower makes no mortgage payments and is not required to meet an income or credit qualification.  The only requirement is that the balance of the mortgage be paid when the last borrower on the mortgage moves, refinances, sells, or dies.  If the value of the property is lower than the mortgage balance, however, the borrower’s liability is limited by the property value, and the FHA covers the difference.

Concerns have been raised about the potential for losses in the FHA’s reverse mortgage portfolio.  HUD Secretary Shaun Donovan has testified that HUD needs authority from Congress to make immediate administrative changes to the FHA reverse mortgage program.[2]  The normal regulatory process could take up to 18 months, during which time FHA continues to lose money.

H.R. 2167 gives the Secretary the authority to make necessary changes to the FHA reverse mortgage program.

[1] See Committee on Financial Services Press Release from May 16, 2013.

[2] Donovan, Shaun, Secretary of the Department of Housing and Urban Development.  Testimony, December 6, 2012, before the U.S. Senate, Committee on Banking, Housing, and Urban Affairs.  Available here


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