The Consumer Financial Protection Bureau has ordered three reverse mortgage lenders to pay a collective civil penalty of $790,000 over allegedly deceptive advertisements.
American Advisors Group, Reverse Mortgage Solutions Inc. and Aegean Financial allegedly told consumers that they could not lose their homes with a reverse mortgage, a type of home loan that allows homeowners who are 62 or older to borrow against the equity in their homes.
The CFPB imposed a civil penalty of $400,000 on American Advisors Group, $325,000 on Reverse Mortgage Solutions and $65,000 on Aegean Financial.
In addition to telling consumers that they could not lose their homes, American Advisors Group allegedly falsely told potential consumers that they would not have monthly payments and they would be able to erase debts with a reverse mortgage. Reverse Mortgage Solutions also allegedly misrepresented that potential customers would have no payments with a reverse mortgage. Aegean Financial told potential customers that they would have no payments with reverse mortgage and claimed that consumers would not be subject to costs associated with refinancing a reverse mortgage.
Aside from paying civil penalty, the reverse mortgage lenders were also ordered to stop deceptive advertising practices and implement systems to ensure they are complying with the law.