Fox News contributor Gail Buckner writes that as reverse mortgages continue to get more popular, federal regulators are taking notice.
“Reverse mortgages in the right circumstances are a good idea for people who need income,” says John Gannon, who heads up investor education at FINRA (Financial Industry Regulatory Authority), the watchdog over the brokerage industry. “It allows them to tap into the equity in their home and pay their expenses.”
FINRA’s says it’s concerned that reverse mortgages are being marketed as a way to fund investments, not as a way to provide a needed source of additional income.
“We saw an increase in the number of investment professionals marketing reverse mortgages as a tool to tap into people’s assets,” said Gannon. In these cases, he says, the seniors taking out the reverse mortgages are “not using the money for income, but are reinvesting it and hope to generate more income”.
Interesting that FINRA is acknowledging that investment professionals and not reverse mortgage professionals are marketing the loans as a way to fund investments.