industry, with a response from that industry’s association president taking the issue head on.
“We share consumers’ concerns that any advertising should be accurate,” says Peter Bell, president of the National Reverse
Mortgage Lenders Association. “That’s why NRMLA has a code of ethics and professional responsibility along with explicit guidance for ethical advertising.”
The CFPB recently released the results of a focus group study that found many consumers were left with false impressions after viewing reverse mortgage advertisements.
According to the study group, after seeing the ads, many were confused about reverse mortgages
being loans. Many were also left with the impression that reverse mortgages were a government benefit, or that they would ensure consumers could stay in their homes for the rest of their lives, according to the CFPB.
The CFPB took the study findings very seriously, saying it would issue an advisory warning consumers that many reverse mortgage ads are misleading.
“As older consumers consider reverse loans to tap into their home equity
, they need to be careful of those late-night TV ads that seem too good to be true,” said CFPB Director Richard Cordray. “It is important that advertisers do not downplay the terms an risks of reverse mortgages or confuse prospective borrowers.
For Bell and the NRMLA, education of the consumer comes first.
“As an association we are committed to educating consumers about the pros and cons of reverse mortgages,” says Bell, “training lenders to be sensitive to clients' needs, and enforcing our Code of Ethics and Professional Responsibility.”
The CFPB study was based on 97 different ads found on television, radio, the Internet, and in print. The CFPB interviewed about 60 homeowners old enough to qualify for reverse mortgages in focus groups and one-on-one interviews. The agency said that the study found many ads to be incomplete or contain inaccurate information.
To see the original story and how the CFPB study group characterized the advertisements, click here.
A Consumer Financial Protection Bureau study’s findings have stirred up a hornet’s nest in the