Reverse Mortgage Companies See Reversal of Fortunes
This week, the Consumer Financial Protection Bureau (CFPB) announced charges against three top reverse mortgage companies with false claims and deceptive advertising. These companies lured consumers into reverse mortgage contracts under the claim that they would not stand a chance of losing their homes, among other promises.
American Advisors Group, Reverse Mortgage Solutions and Aegean Financial have all been ordered to cease deceptive advertising, comply with regulations and pay penalties by the CFPB.
The largest of the three, American Advisors Group (AAG) is licensed in 49 states and the District of Columbia. The company’s deceptive advertising reached over 1 million consumers, nationwide, from 2012-2016.
AAG’s false claims include:
- Homeowners keeping their homes for life
- No monthly payments
- Reverse mortgage programs would settle all debts.
On top of compliance regulation, American Advisors Group is ordered to pay a civil penalty of $400 thousand.
RMS is licensed in 48 states.
RMS’s false claims include:
- Consumers would keep their homes for life
- Property heirs would be entitled to inheritance of homes
- Creating a false sense of urgency to purchase packages.
Reverse Mortgage Solutions has been ordered to pay a $325 thousand penalty along with regulation compliance measures.
Aegean operates as Jubilados Financial for Spanish-speaking consumers in California and as Reverse Mortgage Professionals for consumers in California, Oregon, Washington and Texas.
Aegean Financial marketed false claims that:
- Consumers could not lose their homes
- Would not be subject to monthly payments of refinance fees
- Jubilados Financial falsely advertised to be a government-affiliated org.
Aegean Financial is ordered to pay a civil penalty of $65 thousand along with regulation compliance measures.
Resources and Links
- Read the full CFPB alert here
- Copy of American Advisors Group consent order
- Copy of Reverse Mortgage Solutions consent order
- Copy of Aegean Financial consent order
Savage Villoch Law, PLLC is devoted to protecting consumers from becoming victims of fraud and deceit. Reverse mortgages programs are prominent in Florida. If you feel you have entered into one of these programs under false claims or deceptive advertising call us today and find out how you can be protected.