Thanks for your note.

You make a good point, I suspect the trouble is in how to draw that bright line between what is allowed and what is not.

One of the by-products of abuse is over-reaaction. That’s not fair to the people who act honorably, but it seems like a common result.

I’m very much opposed to the guys who sell deferred annuities with reverse mortgage proceeeds, but the broadly prohibitive language in the bill does not distinguish between deferred annuities, immediate annuities which can rarely but occasionally provide higher incomes than the reverse mortgage payments, life insurance to protect a spouse, estate, or increase a legacy, and even long-term care insurance. It could also prohibit a good insurance agent from using a medicare Advantage plan to save the borrowers hundrdeds of dollars each month versus a Medicare Supplement health plan. Most securities broker-dealers already prohibit using home equity to fund market-based investments.

I mention long-term care because the same legislation resurrects and implements the Clinton-era law stating that FHA mortgage insurance premiums will be refunded to those that use reverse miortgage premiums to purchase long-term care insurance.

We can stop the “get a reverse mortgage so you can buy this annuity” guys with much narrower language. The current language just imagines that professionals all operate in distinctly regulated “silos” - they don’t, and customers benefit from pros with multiple licenses who can talk about the pros and cons of a broader range of ideas and products. These are the guys who are in business to first find out what the client wants to do, and then figure out the best way to do it. The norm, and the regulatory assumptions, in the financial industry is the other way around.

If they are asking me to fund an annuity with the proceeds from a reverse mortgage or trying to sell a subprime loan I would not want either of them.

Happily, there are more and better choices out there.

Thanks for your note.

The last version of the bill, as posted by THOMAS, is H.R.3221.EAS2, the “Housing and Economic Recovery Act of 2008 (the “Engrossed Amendment as Agreed to by Senate.” This is what is on the public record.

Is there a later version of the legislation?

Peter

Those with previous and current professional licenses from the financial services industry actually bring valuable knowledge to the reverse space in retirement planning, financial fact-finding and many other areas.

It looks like yet another case of throwing out the baby with the bath water.

I was under the impression this was removed from the Bill? When you check out the text it has been crossed out… let me know if I am missing something.

Thanks