Senator Claire McCaskill continued to express her concern over reverse mortgages at Senate Commerce Committee hearing earlier this week. The hearing included testimony from the Federal Trade Commission, National Consumers League and a few others to discuss “Protecting Consumers During Downward Economic Times”.
During the hearing a range of topics are discussed but towards the end McCaskill turns the focus to reverse mortgages. “It is very clear to me that these are complicated, expensive financial instruments that, while they may be appropriate in limited circumstances for some seniors with appropriate counseling and appropriate information, they are being marketed now in ways that make my blood boil,” said McCaskill.
She asked Chris Koster, Attorney General for Missouri about what his office has seen in its investigations about reverse mortgage scams.
“I’m aware of the targeting that is occurring as though they were marketing different types of magazines to seniors, my experience is 9 out of 10 of these reverse mortgages and increasingly these sale leaseback agreements have been a tremendous advantage opportunity for taking by scammers,” said Koster.
McCaskill then asked the FTC representative what its recently formed task force has been doing in regards to reverse mortgages. Specifically she is concerned about lenders marketing reverse mortgages as a stimulus benefit, which she heard about through Twitter. Yes, McCaskill is fighting reverse mortgage fraud through Twitter.
The FTC representative said the task force is now in the rule making process for policies on mortgage advertising and are working to address some of the issues McCaskill had raised. They’re also looking for enforcement cases in regards to these claims and asks McCaskill to forward on the “tweet” she received.
I thought McCaskill was just making this up so I searched Twitter and found her account. After a little digging I found the “tweet” she is referring to:
@clairecmc Seniors in Illinois recv letters from Reverse Mortgage lender American Advisor Group in Irvine CA, refer to POTUS Recovery Act
Now, I’m not an expert on Twitter, but I’m assuming that POTUS means “part of the US” recovery act. Well, reverse mortgages are part of the Housing and Economic Recovery Act of 2008. If AAG is promoting reverse mortgages as a stimulus benefit, I can see how that could be a cause for concern. However, the random person from Twitter doesn’t post a link to the letter or offer any real evidence.
I’m a bit shocked that a United States Senator is trying to use random “tweets” as evidence at a committee hearing. You can watch the video at the link below, reverse mortgage discussion starts about 80 minutes in.