This month, the Consumer Financial Protection Bureau (CFPB) published the article A closer look at reverse mortgage advertisements and consumer risks, which
examines its study of advertisements for this product to older homeowners. The
CFPB found “many contained confusing, incomplete, and inaccurate statements
regarding borrower requirements, government insurance, and borrower risks”.
Nonetheless, CFPB does acknowledge that “reverse mortgages can help some older
homeowners meet financial needs”, which makes them an important product for
real estate brokers to understand.
Unfortunately, the article finds that
“[c]onsumers described ‘lifestyle enhancement’ as the primary use for reverse
mortgage proceeds”, but a reverse mortgage should only be used as a last resort
because “homeowners can lose their home if they fail to meet the loan terms”.
Brokers should read this article and decide for themselves
if a reverse mortgage is a good product to recommend.
