WASHINGTON -- As expected, Congress has passed legislation that promises to make several consumer-friendly improvements to reverse mortgage programs that allow senior home owners to convert a portion of their equity into cash. But there's catch.

The changes are contained in a conference report to the fiscal 2000 appropriations bill for the Department of Housing and Urban Development, Department of Veterans Affairs and the independent federal agencies. While the report reflects lawmakers' intent, and strongly urges that their instructions be carried out, the language isn't binding.

However, HUD Secretary Andrew Cuomo has endorsed the package, and the National Reverse Mortgage Lenders Association, whose members originate and service perhaps 90 percent off all reverse loans, has called on him to implement the changes as quickly as possible.

Also known as a home equity conversion mortgage, or HECM, a reverse loan enables older home owners to convert part of the equity they've built up in their homes over the years into tax-free income without having to sell, give up title, move out or make monthly payments. The loan is repayable only when the borrower passes away, sells the house or permanently moves out.

Borrowers can take the loan proceeds in one lump sum or in monthly payments, and can use the funds as they see fit -- to pay for home improvements or needed repairs, health care or even travel. The amount the owner receives is based on his remaining life expectancy and the value of the property. But the repayment amount that must be paid back cannot exceed the value of the home.

The reverse mortgage provisions in the report direct HUD to:

Published: November 15, 1999

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.