Consumer Law Group: Reverse Mortgages Ripe for Consumer Abuse?

[forum_admin]

Reverse Mortgages Are "Subprime Revisited," Says Consumer Law Group

Many of the now-discredited practices that enabled the subprime mortgage market to boom and then bust have reappeared in the reverse mortgage business, threatening senior citizens and potentially putting taxpayers on the hook for billions, according to a report issued Tuesday.

Reverse mortgages enable homeowners aged 62 and over to withdraw equity from their homes. Unlike a traditional mortgage, owners essentially sell back their home over time to a lender in return for a steady stream of money.

The National Consumer Law Center argues that the industry is rife with abuse: deceptive marketing claims that unfairly target seniors; a lack of sufficient counseling for borrowers, adequate consumer protection and enforcement against bad actors; and the presence of kickbacks to brokers whose compensation rises if borrowers pay higher rates.

Read more at: Reverse Mortgages Are "Subprime Revisited," Says Consumer Law Group

It should also be regulated heavily in my opinoin!