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CFPB Takes Action Against Reverse Mortgage Companies
On Wednesday, December 7, 2016, the CFPB took action against three reverse mortgage companies for alleged deceptive advertisements, such as claiming that consumers could not lose their homes. The Bureau ordered American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial to cease deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay penalties.
In a June 2012 Report to Congress on Reverse Mortgages, the CFPB stated, “[f]alse and misleading advertising poses a serious risk to consumers.” The CFPB also published a June 2015 study, and accompanying advisory warning, reaffirming the risk to consumers as a result of deceptive and misleading reverse mortgage advertising.
The Mortgage Acts and Practices Advertising Rule prohibits misleading claims in mortgage advertising. In addition, Dodd-Frank prohibits institutions from engaging in deceptive acts or practices, including with regard to advertising of consumer financial products or services.