A bill introduced into the United States House of Representatives seeking to prevent evictions, foreclosures, and unsafe housing conditions resulting from the COVID-19 pandemic includes reverse mortgage borrowers, and was recently passed in the House before being sent to the U.S. Senate.
The bill, House Resolution (H.R.) 7301 known as the “Emergency Housing Protections and Relief Act of 2020,” was introduced into the House by Financial Services Committee Chairwoman Rep. Maxine Waters (D-Calif.) and aims to provide additional protections to renters and homeowners who have been impacted by the COVID-19 coronavirus pandemic. For impacted reverse mortgage borrowers, the bill would provide additional options for the borrower to retain their home after a loan is called due and payable.
A reverse mortgage servicer will be in compliance with the bill if they make a good faith effort to communicate options for the borrower that are designed to allow them to remain in their home, and if they adequately inform a borrower of all the retention options that are available to them while also encouraging them to apply for such options.
The bill also aims to codify the inclusion of a 10-year repayment plan into all of the existing home retention options, while also not allowing the curtailing of “interest paid to mortgagees who engage in loss mitigation or home retention actions through interest curtailment during such loss mitigation or home retention review or during the period when a loss mitigation or home retention plan is in effect and ending 90 days after any such plan terminates,” the text of the bill reads.
In addition to the reverse mortgage-specific provisions, the bill also calls for the addition of $100 billion for pandemic-affected renters and $75 billion for similarly-situated homeowners to assist them with covering costs like rent, utilities and mortgage payments.
While the provisions of this bill were unattached from a separate, larger relief bill in order to potentially increase its chances of being passed in the Senate, support for the bill still remains largely one-sided. While the bill did pass in the House by a vote of 232-180, none of the “yea” votes came from Republicans. Additionally if the bill did manage to gain enough bipartisan support to pass in the Senate, the White House detailed that President Trump’s advisors would recommend that he veto the bill.
“The Administration supports efforts to protect homeowners and renters experiencing financial hardships during the coronavirus pandemic, but it opposes H.R. 7301,” the Administration writes in a letter from the Office of Management and Budget (OMB). “This bill represents misguided Federal overreach into mortgage and housing markets that fails to account for actions that the Administration has already taken. H.R. 7301 also includes burdensome new mandates that will ultimately complicate existing Federal, local, and private efforts to respond to the coronavirus.”
Read the text of H.R. 7301 at Congress.gov.
