{"id":2925,"date":"2015-06-29T07:00:35","date_gmt":"2015-06-29T12:00:35","guid":{"rendered":"https:\/\/nybankruptcy.net\/main\/?p=2925"},"modified":"2018-12-10T08:45:17","modified_gmt":"2018-12-10T08:45:17","slug":"cfpb-finds-reverse-mortgage-advertisements-confusing-and-misleading","status":"publish","type":"post","link":"https:\/\/nybankruptcy.net\/main\/cfpb-finds-reverse-mortgage-advertisements-confusing-and-misleading\/","title":{"rendered":"CFPB Finds Reverse Mortgage Advertisements Confusing and Misleading"},"content":{"rendered":"

A few months back I wrote<\/a> that it was fair to allow the Consumer Financial Protection Bureau (CFPB) to share its two cents about reverse mortgages. It was a rebuttal of sorts to a neutral explanation I had given previously<\/a>. Recently, the CFPB authored a piece on the subject again, so now it\u2019s a little more than two cents in its favor. Reverse mortgages are an important issue because excessive borrowing can lead to a New York bankruptcy filing. This time, the bureau is concerned with the advertising lenders use to convince homeowners to purchase reverse mortgages, specifically ads that appeared on the Internet, radio, television, and in print between 2013 and 2014.<\/p>\n

As a brief recap, a reverse mortgage gives the homeowner payouts against his or her house\u2019s equity. It must be repaid at some point, usually after the homeowner sells the property or passes away. It\u2019s \u201creverse\u201d in the sense that the homeowner draws down the home\u2019s equity with each payment rather than builds it up.<\/p>\n

So what did the CFPB discover about advertising relating to reverse mortgages?<\/p>\n

Looking at focus groups and interviewing a handful of individual homeowners in three cities, the CFPB concluded that reverse mortgage lenders\u2019 advertising was highly problematic. In its initial review, which (since fairness is what we\u2019re striving for) was based on the bureau\u2019s own educated workers\u2019 opinions, it characterized the ads as containing \u201cconfusing, incomplete, and inaccurate statements regarding borrower requirements, government insurance, and borrow risks.\u201d<\/p>\n

As for the focus groups, they included 59 homeowners over the age of 62. Here are a few of the CFPB\u2019s more striking findings:<\/p>\n