Reverse Mortgage BrokersInverted mortgage brokers
According to the Bureau, the three creditors adopted assent resolutions claiming that they contravened the Mortgage Act and Practice' advertising rules - which prohibit fraudulent mortgage promotion claim - and the Dodd-Frank Wall Street Reform and Consumer Protection Act's ban on fraudulent actions or practice. Letters of Approval state that the United States' biggest reverse mortgage financier, American Advisors Group of California, has been running TV commercials almost every day, distributing its information pack with a DVDs and product booklets to approximately 1 million people.
In spite of all this information, the Bureau said that the advertisements falsely stated that the consumer could not loose their home under a reverse mortgage deal and that they had the right to stay in their home for the remainder of their life. Advertisements also told customers that they would not receive any payment on a per month basis and would be able to repay all their debt with a reverse mortgage.
However, reverse mortgage loans still demand cash and can lead to defaults, the CFPB noted, with borrower losses if they do not meet credit conditions and pay real estate tax, householders' liability insurances and upkeep. In order to pay the costs, American Advisors must clearly disclose these facts in its reverse mortgage ads and must put in place a programme to enforce adherence to all relevant Acts.
CFPB asserts that similarly misleading allegations have been made by Reverse Mortgage Solutions (RMS) of Texas, who have been marketing their product via TV, wireless, print, online advertising and the web, falsely claiming since 2012 that customers would not loose their houses, could stay in their houses for the remainder of their life, "would always keep property" and "could not be compelled to leave".
" The consumer was also assured that their inheritors would come into the house without disclosing substantive terms (e.g. the obligation for the inheritor to reimburse the reverse mortgage or paying 95 per cent of the estimated value). Under the CFPB approval resolution, RMS pays a $325,000 civilian fine, implements a programme to enforce adherence to all relevant legislation, and makes clear and conspicuous announcements in its reverse mortgage notices.
Aegean Financial has also misled the consumer with misleading advertising allegations (print, advertising, broadcast and internet) that the consumer cannot loose their home, has the right to remain in their home for the remainder of their life, has no reverse mortgage payment and is not liable to the cost of reverse mortgage funding.
If you are 62 years or older and own a home, we have good breaking information for you; you are eligible for a reverse mortgage from the United States Housing Department. "The CFPB continues that all disclosure provided by Aegean is "small" or "quickly recited" at the end of commercial spots.
In addition to a prohibition to imply membership of the federal administration and to pay a fine of $65,000, Aegean must keep full and accurate record of its ads, make clear and conspicuous disclosure in its reverse mortgage ads, and put in place a programme to enforce adherence to all relevant legislation. Click here to view the informed disclosure statement in In the Hatter of American Advisors Group.
Click here to view the Compliance Statement in In the Hatter of Reverse Mortgage Solutions. Click here to view the Compliance Statement in In the Aegean Financial. CFPB is focusing a lot of interest on reverse mortgage lending and, despite its many benefits for older American investors trying to use their homes, is becoming more and more sceptical.
"Those businesses have led the consumer to believe that they could not loose their houses with a reverse mortgage," said office director Richard Cordray in a statement on the acts. "Mortgage brokers and creditors must comply with the publication obligations of Swiss government advertisements when applying for their mortgage loans. "The CFPB found that since 2012 it has issued warnings of the risks of false and false publicity for reverse mortgage loans, followed by a 2015 survey and a consumer information caveat.
They also underline that the CFPB focuses on protecting older people from misuse, also through its Office of Older Americans.