AARP: Lenders abuse reverse mortgage sales

Posted by News Feeds

January 23, 2008

AARP: Lenders abuse reverse mortgage sales,

Firms then push LTC, annuities to borrowers

Reverse-mortgage lenders may be depleting the home equity of borrowers by offering inappropriate financial products, according to a report issued last month by AARP.

Nine percent of borrowers surveyed by the association said lenders had offered them financial products such as annuities and long-term-care insurance which, according to the study, “may be unwise investments given the costs and purposes of the loan.”

“Consumers should be wary of anyone who tries to sell them something to be paid for with a reverse mortgage,” said Donald Redfoot, strategic-policy adviser for Washington-based AARP’s Public Policy Institute, and the principal author of the report, which was presented to a hearing of the Senate Aging Committee last month.

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AARP: Lenders abuse reverse mortgage sales

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