The Consumer Financial Protection Bureau (CFPB) issued an advisory Monday outlining three steps consumers with a reverse mortgage should take in response to complaints lodged by borrowers.
The advisory was issued on the same day that the CFPB released a report highlighting consumers’ top complaints for reverse mortgages.
“We’ve heard many complaints from consumers who have experienced problems with reverse mortgages,” the CFPB says on its website, noting the most common complaint is regarding difficulty with changing the loan terms and problems communicating with reverse mortgage loan officers.
Additional complaints include those coming from non-borrowing spouses who are facing the loss of their home after the borrowing spouse has died, the CFPB says.
While updates to the Federal Housing Authority’s (FHA) Home Equity Conversion Mortgage (HECM) program allow some non-borrowing spouses to remain in the home after the death of the borrower spouse for HECM loans originated after Aug. 4, 2014, that change is not retroactive, the CFPB notes.
Three steps the CFPB advises consumers with a reverse mortgage to take are: verify who is on the loan; make a plan for the non-borrowing spouse, if the reverse mortgage is only in the name of one spouse; and make a plan for any non-borrower family members living in the home.
Read the advisory here.
Written by Cassandra Dowell