Legislation overwhelmingly passed by the House Wednesday would in most cases bar banks that sell reverse mortgages backed by the government from selling insurance products to the same customers.
The provision is contained in H.R. 3221, a housing bill that would provide a government backstop to the ailing Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).
It would also strengthen oversight of Freddie and Fannie and potentially allows up to 300,000 homeowners faced with foreclosure to refinance under favorable terms through the Federal Housing Administration.
The bill passed the House 272-152 and was expected to be passed by the Senate.
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Banks, led by lobbyists for the American Bankers Association, and insurers, led by lobbyists for the American Council of Life Insurers, sought to soften the language–which was contained in the Senate version of the bill–but failed.
The insurance products involved are life insurance, annuities and long term care insurance.