Reverse mortgages are a special type of loan that allows homeowners, 62 and older, to borrow against the accrued equity in their homes. Reverse mortgages can help some older homeowners meet financial needs, but they can jeopardize retirement security if not used carefully.
In February 2015, the Consumer Financial Protection Bureau (CFPB) released a report that some homeowners 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.
If you are having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint to CFPB online or by calling (855) 411-2372 or TTY/TDD (855) 729-2372. The CFPB will forward your complaint to the company and work to get you a response within 15 days.
For additional information, click here.
Teaching Suggestions:
- How can a person access funds from a reverse mortgage?
- Ask students what other alternatives might be available before settling for a reverse mortgage?
Discussion Questions
- What is the purpose of a reverse mortgage?
- Can people with very low equity in their home qualify for a reverse mortgage?
- How can people protect themselves from dishonest reverse mortgage providers that charge exorbitant fees?
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