Today the Consumer Financial Protection Bureau released the
results of a
study on reverse mortgage advertisements. The study was
based upon personal interviews conducted in November and December
2014 with 59 homeowners aged 62 or older in Chicago, Los Angeles,
and Washington, D.C. concerning 97 print, radio, online, and
television ads collected and analyzed by the CFPB.
The study found that after viewing the ads, consumers were
generally confused about reverse mortgage products, and were left
with false impressions concerning the products. The study
noted the following issues:
- Consumers did not understand that reverse mortgages are
loans: Some of those interviewed found it difficult to
understand from the ads that reverse mortgages are loans that need
to be repaid. Most ads do not discuss repayment terms or
clearly identify interest rates. Others thought that because
the money they received through a reverse mortgage represented home
equity they had accrued
