Some Reverse Mortgage Advertising Can Be Misleading
The CFPB recently issued a consumer advisory warning that reverse mortgage advertising can be misleading and confusing. We could not agree more with the statement that some reverse mortgage advertising can be misleading and confusing. It’s hardly a surprise that the most misunderstood financial product in the country is advertised in a way that does not provide clear information to consumers. We are happy to see the focus on reverse mortgage advertising and the push for more transparency in the reverse mortgage. We work very hard to produce only accurate marketing pieces. We believe it is our duty to provide customers with transparent and honest reverse mortgage advertising. Education and understanding is the key to helping people make the right decision, which is why we spend so much of our time meeting with customers in their home or our office, giving educational seminars and talking with professionals that serve seniors in our area.
A study was conducted in which seniors viewed reverse mortgage advertising, they were then interviewed to see if they understood more about the reverse mortgage. Some seniors were found to not understand that the reverse mortgage is a loan, and mistakenly believed you could never lose your home. Misleading advertisements lead some seniors to believe that they would no longer have to pay for taxes and insurance, association fees, or maintain the home. Many seniors were led to believe that the reverse mortgage is some kind of government benefit, rather than simply being a mortgage that has FHA-insurance that would add to the cost of the loan.
Many of our competitors run reverse mortgage advertisements making bold, often inaccurate claims. The model of some companies in the industry is to generate leads and then assign multiple high pressure telemarketers to try and quickly close the deal. An industry secret that is not well known is that many of the advertisements and websites found online are not actually reverse mortgage providers! They typically offer out-of-date information and too good to be true messaging. These companies sell your name and contact information to whoever is willing to pay. These companies not only market online, they run infomercials and television advertisements. That’s why it’s important to recognize who you are dealing with online. Look for detailed About Us sections and proof that you are dealing with an actual reverse mortgage provider and not a lead company.
There has been an enormous increase in the number of very misleading and self-serving advertisements mailed to seniors in recent years. We regularly are called by former clients and forwarded copies of mailers that they receive showing grossly inaccurate statements and making false promises. Several companies have been fined recently for stating or implying that they were affiliated or endorsed by a government agency or that reverse mortgages are endorsed by the government. This is not the case. Private companies originate all reverse mortgages, the government is not involved! FHA does insure the majority of reverse mortgages, however this does not mean they are endorsing the product for all seniors. To be clear, this article is an advertisement for Access Reverse Mortgage Corporation and is not information from FHA or HUD. Neither FHA or HUD has reviewed or approved this information, and they have not endorsed my company, or any other reverse mortgage provider. They simply insure the mortgages.
The letters and postcards sent out often suggest that you should refinance your current mortgage, even refinancing your reverse mortgage to access more money. This can be very misleading. The information in these letters and postcards typically comes from public records and can often show figures that are far from the truth. DO NOT spend any money on counseling or an appraisal to begin this process without discussing it with us first. We recently had a customer considering refinancing their reverse mortgage because a postcard said she would receive an additional $38,000. Unfortunately she spent $450 on an appraisal only to find out that the numbers they based their estimate on did not take in to account an accurate current balance for her reverse mortgage. She wasn’t able to refinance and was out of pocket $450. Before you spend your time and money, call us. We can’t guarantee that we can help you in every situation, but we could have saved our past customer $450 that she wasted trying the process with another company.
We believe the reverse mortgage can be a great solution for many people, but it is not right for everyone. Reverse mortgage advertising may not provide you with all the information you need. Our goal is to help you learn enough about the program to make a great decision for yourself. We encourage our clients to include their family and trusted adviser’s (such as your attorney, financial planner, etc.) in your decision-making process. If they have questions, we’ll sit down and work through them until everyone is satisfied.
Read through what the CFPB has to say regarding reverse mortgage advertising on their website, and compare that to what you see on our site. Just to be clear, the CFPB has not reviewed or approved the information in this article or on our website, mentioning the CFPB is not meant to imply that they endorse Access Reverse Mortgage Corporation. Our reverse mortgage advertising is honest and straightforward. Our number one goal is to provide you with excellent customer service, always doing what is right for you, our customers.
These materials are not from HUD or FHA and were not approved by HUD or a government agency.