The Consumer Finance Protection Bureau (CFPB) has issued an advisory for persons aged 62 and older who have taken out a reverse mortgages. The advisory comes on the heels of publishing its Snapshot of reverse mortgage complaints December 2011 – December 2014. Here is an excerpt from the advisory:
We’ve heard many complaints from consumers who have experienced problems with reverse mortgages. The most common reverse mortgage complaint is about difficulty with changing the loan terms and problems communicating with loan servicers. Some consumers, for example, express frustration about slow, inconsistent communication from their reverse mortgage loan servicer.
We’ve also heard from consumers regarding non-borrowing spouses who are facing the loss of their home after the borrowing spouse has died. Recent changes to the federal program that insures most reverse mortgages allows some non-borrowing spouses to remain in the home after the death of the borrower spouse for HECM loans originated after August 4, 2014. Since this change is not retroactive, spouses of reverse mortgage borrowers who took out their loan prior to August 4, 2014 could be more likely to face losing the home when the borrower dies.
To read more of the CFPB’s advisory, please click here.