Deceptive Reverse Mortgage Advertising Reports in Oregon

NewImage.jpgOnly days after the Federal Reserve issued a proposed rule to reign in deceptive reverse mortgage advertising, Oregon Live is reporting that San Diego, CA, based EquiPoint Financial Network is mailing out fake checks to seniors that read “U.S. Economic Stimulus Package Approves New Payouts for Seniors”.

The marketing materials published on the website fail to list the name of the company or any other details about who is providing the information.  The only unique identifier is the EquiPoint’s Oregon mortgage license number.

According to the article, the Oregon Division of Finances and Corporate Securities says it has sent two different letters asking EquiPoint to add its company name to its mailings and remove any implied affiliation with a government agency.  Lisa Morawski, a division spokeswoman, told Only Money that the company has not responded. “We are sending another request with an expedited timeline,” she said.

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The advertisement also includes a picture of CNBC financial host and author Suze Orman saying, “look into reverse mortgages, they’re a good way to go”.  A representative for Suze Orman Media said it’s considering taking legal action against the company because it never authorized the use of her photo.  ”We will be forwarding to our legal council for action and of course, Ms. Orman has nothing to do with this company,” the representative said in an email.

RMD reached out to the company for comment regarding the allegations and Bruce Barnes, President of EquiPoint, said the advertisement published was sent out by a branch office without the consent and approval of the corporate office.

“Prior to receiving this notice we had already made the necessary corrections to the branches advertising material which included the removal of anything considered deceptive and anything referencing Suze Orman,” said Barnes in an email to RMD.  He added that the company has only received one notice from the state and it responded accordingly.

According to data from the Department of Housing and Urban Development, the company does the majority of its business in Oregon.  EquiPoint in the third largest reverse mortgage lender in the state, endorsing 62 HECMs through June 2010.

EquiPoint is also a member of the National Reverse Mortgage Lenders Association, which requires members operate under a strict code of conduct.  “A complaint on the ad has been filed with the Ethics committee and it’s in the process of investigating,” said Marty Bell, Senior Vice President, Marketing & Communications for NRMLA in an email to RMD.

Check out the articles here and here.

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  • Who cares if the culprit was a branch. That excuse is a total cop out. The excuse sounds as weak as: “My dog ate my homework without first getting my permission….” rnrnBy proclaiming that excuse EquiPoint MANAGEMENT is all but admitting it has no written policy regarding the violations indicated and has also lost control of its advertising internal review process. That admission in itself is enough to take significant action against EquiPoint management.rnrnThis type of inappropriate advertising deserved an immediate reaction and the responder should have indicated it was taken and what it was. The excuse given indicates the level of the individual who should not only be reprimanded but also terminated along with those who actually created, distributed, and approved the mailers. What a silly and weak response by management.rnrnIf EquiPoint was serious about internal controls, it would have issued a statement that clearly stated EquiPoint was wrong with an apology to those who received the mailers and Suzy Orman indicating that the persons responsible for the creation, distribution, and approval of the mailers had violated its stated and written policies along with internal control mandates and that dismal and other appropriate internal proceedings were now pending against all those involved. Now that sounds far more responsible to this reader.rnrnThe way this was and is being handled makes us all look bad.

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