National Consumer Law Center Releases Report On Reverse Mortgages
Report Draws Comparisons To Subprime Problems
The National Consumer Law Center recently released a report titled “Subprime Revisited: How the Rise of the Reverse Mortgage Lending Industry Puts Older Homeowners at Risk” that highlights abuses from the subprime mortgage market have begun showing up in the reverse mortgage industry. The report notes that some of players have turned their attention to the reverse mortgage market as profits in other areas have dried up.
“In the reverse mortgage market, seniors face some of the same aggressive lending practices that were common in the subprime lending boom,” said Tara Twomey, an NCLC attorney and author of the report. “Well-funded marketing campaigns and perverse incentives to brokers are targeting seniors’ home equity and using reverse mortgages as their tools”
U.S. Senator Claire McCaskill said the report validates the need for regulatory improvements in this industry in order to protect America’s seniors as well as our tax dollars. “We’ve seen this movie before and it didn’t have a pretty ending. Abuses in the subprime lending market almost brought down our economy. Now we’re seeing similar abuses with reverse mortgage lending – something needs to be done before more lifesavings are depleted and more tax dollars are drained,” Sen. McCaskill said.
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