The CFPB analyzed complaints about reverse mortgages for a recently released report, indicating that consumers are confused about loan terms and experience servicer runarounds and foreclosure problems.
“The CFPB report covers 1,200 reverse mortgage complaints received at the Bureau between . . . December 1, 2011, and December 31, 2014. Reverse mortgage complaints comprised about 1 percent of all mortgage complaints, by all ages, during this timeframe.”
“Many complaints show a mismatch between consumer expectations and the way the product functions. Many consumers, for example, struggle with understanding how quickly their loan balance will go up and their home equity will fall. The top complaints about reverse mortgages included:”
- The inability to add new borrowers to an existing loan;
- Runarounds when trying to pay off the debt; and
- Struggles with foreclosure due to issues with property taxes and homeowners’ insurance.