Promote Your Attorney Profile on Law.net - Get Found / Earn More!
Colorado Supreme Court Will Determine If Marijuana Use is Lawful
Colorado Supreme Court Will Determine If Marijuana Use is Lawful
FBI Creates New Felony Category for Animal Cruelty
FBI Creates New Felony Category for Animal Cruelty
New Survey Finds That Legal Spending Increased Across the World
New Survey Finds That Legal Spending Increased Across the World
Court Dismisses Lawsuits Filed Against Chicago-Area Law Schools
Court Dismisses Lawsuits Filed Against Chicago-Area Law Schools
Your profile matches an open legal position. Apply now!
Legal Job Listings

Bill to Cap Reverse Mortgages Taken by Senior Citizens Becomes Law

On Friday, President Obama signed into law a bill sponsored by U.S. Rep. Mike Fitzpatrick that seeks to put a cap on the amount of money senior citizens may borrow against the values of their homes. The bipartisan bill, which was also sponsored by Rep. Denny Heck passed both House and Senate without much opposition.

The new law empowers the Federal Housing Administration to create new regulations to cap the amount of money senior citizens can withdraw initially against the value of their homes. Such deals, commonly referred to as reverse mortgages are often used by people who lack liquid assets, but have high-value houses.

Usually, in reverse mortgages, the mortgagee has the option to opt for an upfront lump sum payment or monthly payments. However, those who usually opt for a large lump sum amount often run into problems.

What

 job title, keywords

Where

 city, state, zip



Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!


Fitzpatrick explained, “If you take a large lump-sum payment and then three years later they’re failing behind on their taxes or insurance, then the senior is going to find themselves in a very difficult situation. He further elaborated that senior citizens often enter into reverse mortgages without fully understanding the consequences, and that the costs associated with living in and maintaining the home remains with them even after releasing a major part of the equity.

Often the lump-sum is used up quickly to pay off previous liabilities and for home repairs and many nonessential costs, sometimes leaving the senior citizen in precarious conditions.

While some industry experts have criticized the law indicating that it might lead to a decline in the demand of reverse mortgages, Fitzpatrick holds that the end was better for the home owners. He said, “I want to see that [the reverse mortgage system] continues to provide good options for seniors and permits them to maintain the lifestyle to which they’ve been accustomed in their own homes.”

Bill to Cap Reverse Mortgages Taken by Senior Citizens Becomes Law by

Tagged: ,

Posted by on August 10, 2013. Filed under Legal News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

 

 

Job of the Day
Corporate Counsel, Mergers & Acquisitions
USA-NY-New York City

Our client, a worldwide tech company, is looking to add a corporate m&a associate counsel with 5-8 years of experience to their in-house legal team. This candidate should have experience wit...