The Division of Banks in Massachusetts ordered five companies across the nation this week to stop reverse mortgage practices in the state. The Division of Banks charges that those companies are not licensed to do reverse mortgages in Massachusetts, and says it will notify other state regulators where the companies operate, that they have been operating illegally in Massachusetts.
The companies, which are not accused of fraud, but rather of doing reverse mortgage business in Massachusetts without proper licensing, are Eldervantage LLC (Minnesota), Lender 411 LLC (California), Senior Reverse Mortgage Online (Texas), Reverse Mortgage Helpdesk (Nevada) and Reverse Mortgage Site (Nevada).
“Representatives at both Lender 411 and Senior Reverse Mortgage Online said they had not received the order from the state to cease activity,” a Boston Globe report stated. “But they added that they are referral services, not lenders.”
“We connect consumers who are looking for mortgages with professionals,’’ Rocky Foroutan of Lender 411 told the Globe.
The reverse mortgage companies allegedly provided reverse mortgage leads to companies that operated in Massachusetts without licensing.
The state has some safeguards in place that are not typical in other states, such as mandatory face-to-face reverse mortgage counseling, to take effect next year.
The Massachusetts Division of Banks recently issued another cease directive to a reverse mortgage leads provider in October; the violation in that case had to do with advertising practices employed by the company. Since 2009, the state banking division has issued 24 actions relating to reverse mortgages, the Globe reported.
Read the Boston Globe report.
Written by Elizabeth Ecker