HUD Secretary Shaun Donovan
HUD Secretary Shaun Donovan said in a Congressional hearing on Thursday that the Government could raise insurance premiums to avoid the nearly 800 million dollar influx of taxpayer money necessary to offset all the FHA losses given the current housing market, the Wall Street Journal reported on Friday. It would be the first time taxpayer dollars have gone into the reverse mortgage program in its 20-year history. Donovan argued against raising the premiums, on the grounds that increased premiums or heightened restrictions could lower participation in the program.
Secretary Donovan’s fear of increasing fees and lowering participation ought to be heeded by Congress. The reverse mortgage program is a program that can help a lot of individuals remain in their home and avoid foreclosure, as we have already seen. By adding more roadblocks, limitations, and/or costs, the government risks making the program inaccessible to the very people they wish to help the most.