The Consumer Financial Protection Bureau (CFPB), recently published results of a “study” on reverse mortgage advertising and came to the conclusion that
described ads as leading to “ambiguity,” “false impressions,” “difficult-to-read fine print,” and “celebrity endorsements that imply reliability and
The industry is left wondering how they can both market to senior consumers effectively and satisfy the CFPB when it comes to marketing materials.
The study at issue spanned just 59 home-owners age 62 and older who had heard of reverse mortgages, but who did not have reverse mort-gages. The advertisements
used were selected from 97 ads collected by the CFPB from print, radio, online and television sources.
Unfortunately, the CFPB is not releasing the ads that were used in the study and is forcing the National Reverse Mort-gage Lenders Association (NRMLA),
to file a request for the ads through the Freedom of Information Act (FOIA), which allows members of the public to access information from the federal
Back in 2012, NRMLA provided the CFPB with a recommended model dis-closure that it developed. If adopted, the disclosure would have addressed most of the
items they say are troublesome. To this date, NRMLA has not received a reply back from the CFPB regarding the recommendation.
The idea of a disclosure to be placed on all advertising could be helpful, but as you know from reading these newsletters, there are a number of details
that an advertiser simply cannot know about the homeowner’s situation and would have to be addressed individually.
Also, there was no mention in the study of the required counseling session with a HUD approved independent counseling agency whose job it is to make sure
that all homeowners under-stand what they are doing as well as other possible options the homeowner can do in place of taking a reverse mortgage.