CFPB Study on Reverse Mortgage Ads Sparks Mainstream News Heyday

The Consumer Financial Protection Bureau (CFPB) study that raises questions about reverse mortgage ads was quickly disseminated my mainstream media outlets nationwide following the study’s Thursday release. Headlines regarding reverse mortgages contained words such as “mislead” and “elderly […] lose homes” as of Friday morning.

The report sent ripples through the reverse mortgage community, with many saying the report unfairly characterizes the financial tool. In addition, the survey only included the opinions of about 60 homeowners age 62 and older; the study was based on 97 unique ads found on TV, radio, in print and on the Internet.

As the industry continues to confront stereotypes regarding reverse mortgages, including as being a tool of “last resort,” headlines following the study may have only added to the public’s confusion. 


Here are a few of the headlines that followed the CFPB’s release of its study about reverse mortgage advertisements, which the government agency contends are misleading in the report.

“The findings raise concerns about marketing of reverse mortgages, loans that a 2011 USA TODAY report found have not saved seniors from defaulting on their taxes and homeowners insurance payments and potentially losing their homes to foreclosure,” wrote USA Today in an article about the CFPB study.

Written by Cassandra Dowell

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  • SHAME on our industry for not being able to distill 35 pages of necessary disclosures into a 60 second Ad with full comprehension by the viewer. We are apparently also not helping by sending DVD’s and multi-generational Financial Planning Guides / FAQ’s via premium shipping at no cost to the requester. Counseling is also a waste of time and money since our burden of proof will now begin and end in the 1 minute celebrity endorsement.

    Silly us for assuming that a “Federal Housing Authority” Loan program should have ANYTHING to do with our Government. Haven’t we learned anything from the FedEx debacle.

    In our societal zeal to regulate the Regulations we are paralyzing common sense ethical business practices. The sins of the few are dictating the rules for the masses. Social Media is turning us into a nation of tattletales and as the RM industry swirls towards the drain the real victims here are those that could genuinely benefit from the financial leverage of the program, but will be dissuaded by PC misinformation. Very sad.

  • As one Florida originator often says: “Facts mean little. Perception means everything.” If our ads result in these perceptions than why are we fighting the need for change that results in a more realistic picture of a HECM rather than:”Isn’t it time that the home starts paying you?” Or “You do not pay the lender….”

    It has been clear for years that our content needs vast improvement. It is old and the stuff that leads to misconceptions.

  • When you look at what the CFPB stands for you would think it should stand for a committee that is their to help, protect and guide the consumer. There name alone alludes to that conclusion!

    However, the Consumer Financial Protection Bureau is not always what it appears to be. Look at those headlines in the article.

    CFPB Warns About Reverse Mortgage Ads, US Regulators Warn: Ads for Reverse Mortgages Can Mislead and a couple more derogatory headlines in the article.

    Most of us have seen these adds on TV and in print, now do they really represent what these headlines allude to, heck NO!

    Most of the news media don’t even understand how a reverse mortgage works. We will continue to see this kind of media penetration, especially when a bureau like the CFPB releases studies that they have, like last Thursday’s. Remember this, the CFPB has been known to have a major lack of knowledge about the reverse mortgage product.

    We as an industry need to continually counter act these attacks. NRMLA can be a source to counter advertise these false and misleading media releases. I will go as far as saying we need, through NRMLA, AARP and other organizations representing us, demand that they stand up to these attacks.

    We as a unit can counter act these releases through true accounts of our own. We must continue to do what we are doing to counter act this kind of bad publicity but we need to increase it ten fold!!!

    John A. Smaldone

  • Jim,

    If you want rave reviews, then we need to stop the tripe and misleading one-liners that have been run so much in the media like “isn’t it about time the house pays you” or my personal favorite “you do not pay the lender….”

    A lot of people think our one-line claims are no better than the spiel of the snake oil salesperson of bygone years. If we don’t like the reputation then it is time to clean up the ads; otherwise, expect more of the same.

    A reverse mortgage is not the reverse of a mortgage nor is it the opposite of a mortgage. These careless and irresponsible definitions belong in an industry not focused on seniors. At least one Florida Democratic politician (US Rep Karen Thurman) is well known for comparing opponents who use what she considers as dirty tricks on seniors as “preying on seniors like bogus reverse-mortgage peddlers.” With one-liners like the ones we promote and definitions like we foster, how can we expect the press to treat us much better?

    There is no question we can do much better than we have in the past and it is time for us to get there before we are trapped in continual low endorsement volume. We need a higher ad standard than we have today from within the industry.

    One industry consultant claims our low volume is a result of regulatory changes catching up to us but perhaps it is more about relying on misleading one-liners and false definitions in getting seniors to call our telephone numbers. Since the days of our early industry TV spokespeople like Jerry Orbach and James Garner, our ads have only gotten older and staler.

    Not all is lost but the sooner we turn things around, the sooner our overall reputation as responsible originators can be salvaged.

    • You are absolutely correct. My 2 most recent deals helped save their home from Sheriffs sale. Gave them some cash to pay off some Credit Cards. And allowed them to enjoy their lives again….At closing, it seemed as though they found the fountain of youth. The Stress relief was visible. I have been in the mortgage business for over 25 years. It’s funny, everyone always makes some crazy promise at closing…Your Coming to our House Warming Party, We’re going to have a Barbeque for you. Were gonna bake you a Cake. Well none of those things ever seemed to actually Happen. It wasn’t until my very first Reverse Mortgage. I was sitting at the initial meeting, The Husband was raving about his wifes Sour Cream Apple Cake….She said she would bake me one. And guess what????She didn’t make 1….She made 3. And they were fantastic. I cut one up into small pieces, I froze it, and now I share a piece with every new applicant. It is WONDERFUL to hear the amazing stories that they all share with me. I love helping people get their life back on track, and help them afford to live a bit easier. The Reverse when used properly, is far and away the Most impactful financial tool available. I am doing everything I can to spread the positive aspects. We need more true, Happy stories to surface. Although the Mainstream media is always fueled by Negative, Not positive stories.

      • Bob,

        The product is great!! But how we sell it makes the value of the product seem almost ethereal, i.e., not of this earth.

        We need improved ads and marketing.

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