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.