Reverse Mortgage Loan Blog

The Indianapolis 500. The Daytona 500. Now comes the Florida Legislature 2010.

If legislation is compared to an auto race, then some proposals on a fast track might be ready to take the checkered flag soon after lawmakers gather March 2 for the first day of the Legislature’s 2010 session.

State Sen. Mike Fasano, R-New Port Richey, has been guiding three of his bills toward speedy approval – changes to the Florida Public Service Commission, reverse mortgage safeguards and public employee collective bargaining.

PSC changes

First out of the legislative gate could be Senate Bill 1034, which would strengthen the ethical code for PSC commissioners and the top staff of the agency.

Fasano and state Rep. John Legg, R-Port Richey, have been hammering away on this topic since revelations last fall about cozy relationships between regulators and utility executives. The reform bill is ready to go March 2, the first day lawmakers gather. The Florida House version, HB 565, also is gathering steam.

“The senator intends to bring transparency and accountability” to the regulatory agency, Greg Giordano, Fasano’s chief legislative assistant, remarked.

Since the PSC functions as a quasi-judicial body, the changes would require the PSC members to follow rules similar to the code for judges, Giordano explained. It’s unacceptable for a judge to have private conversations with attorneys about an ongoing case, for instance. So changes would raise the threshold for PSC commissioners against what is known in legal circles as “ex parte” communications.

Another amendment would toughen penalties that could be imposed on utilities trying to curry the favor of PSC officials. If found guilty, the company could be liable to pay a fine of one-tenth of 1 percent of operating revenue, based on the most recent fiscal year.

“That’s a pretty good incentive for them not to engage in these activities,” Giordano said. Complaints would be heard first by the Florida Commission on Ethics.

Top PSC officials also would be barred for four years from taking a job with a utility regulated by the agency or lobbying on behalf of a utility they used to oversee.

Mortgage safeguards

Some senior citizens have been stung by reverse mortgages on their homes, which prompted Fasano’s S.B. 1532.

Reverse mortgages are loans designed for people ages 62 and older and who have a significant amount of equity in their homes, Giordano explained.

“My primary concern is that not one senior citizen be taken advantage of by an unscrupulous lender of reverse mortgages,” Fasano commented about his bill.

“Reverse mortgages can be a very good product when sold by reputable lenders to properly educated borrowers,” Fasano added. “In the hands of unscrupulous people it could be a nightmare for a borrower.”

A company offering reverse mortgages will be required to provide a list of five, federally authorized counseling agencies to a potential borrower, Giordano elaborated. Fasano’s bill would require a certification of completion from a counseling class before the loan can be finalized.

Disclosure requirements would be toughened, Giordano said.

Fees would be capped at 2 percent of the value of the loan. Some dishonest firms have been charging outlandish origination fees and other charges.

Collective bargaining

Senate Bill 610 has stirred some controversy among some unionized deputies, yet the measure is moving swiftly through committees.

If collective bargaining reaches an impasse, the proposal would declare sheriffs, tax collectors, property appraisers, supervisors of elections, and clerks of the circuit court as the “legislative body” for their respective employees.

Some Fraternal Order of Police state officials fear the bill could usurp the authority of Florida Public Employees Relations Commission in resolving disputes.

Pasco Sheriff Bob White and many other Florida sheriffs, however, expressed support for the bill during a Feb. 16 hearing in Tallahassee. They argue that contract disputes could wind up before county commissioners in some cases instead of the sheriff and other constitutional officers.

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