Wednesday the House of Representatives passed the so-called Wall Street Reform Bill by a vote of 237 to 192. Now it moves onto the Senate where it is probably going to be looked at beginning July 12th and probably passed. Buried in it's 2000 pages, is the outline of a new Federal Bureaucracy called the "Consumer Financial Protection Bureau". This new department is to write and then enforce rules regarding among other things Reverse Mortgages.
Congress has decided that seniors are not capable of making wise decisions regarding their finances. There is to be a study looking into ways to prevent abusive practices of loan officers and others who may be trying to take unfair advantage of those over age 62. This study is also supposed to determine whether a Reverse Mortgage is "suitable" for the client wishing to take one out.
I am wondering who is going to be wise enough to take on the onerous task of deciding what is best for a senior and what is not. For instance, should a senior be allowed to take out all of their Reverse Mortgage proceeds under the fixed rate FHA program and purchase a lifetime annuity? Should they be able to make a donation to their church or buy a vacation home? I firmly believe that what is "suitable" should not be specified by bureucrats sitting behind a desk in Washington. It should be left up to the senior who had the foresight to pay for his or her home and now has a chance to spend some of the equity. They should be able to do so without getting someone's permission.
As we approach July 4th, I'm reminded of some of the reasons we declared our independence from Great Britain. One of Jefferson's accusations was that King George III "has created a multitude of New Offices, and sent hither swarms of Officers to harass our People.......". Today, more than ever, we really do need less Big Brother and more Independence. As seniors, we may not always make the "right decisions" but it is our right to make them!
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