The Senate on Friday approved legislation that would allow the Department of Housing and Urban Development to prohibit "excessive" fees for reverse mortgages.
Speaking on the Senate floor, Banking Committee Chairman Alfonse M. D'Amato said the bill would prevent "unscrupulous, high-pressure middlemen" from "scamming needy seniors out of their savings." The bill passed on a voice vote.
Sen. D'Amato said he was "outraged" that hundreds of senior citizens have been charged up to $10,000 for information on reverse mortgages that HUD offers for free.
If the bill is enacted, HUD Secretary Andrew Cuomo has said lenders that do business with lawbreakers will be banned from all agency programs.
Reverse mortgages are available through a federally guaranteed program that allows people 62 or older to receive payments based on the equity in their homes. Similar legislation has been introduced in the House by Rep. Rick Lazio, R-N.Y.