Illinois Attorney General files suit against two reverse mortgage brokers for deceptive practices

According to industry blog site reverse mortgage daily, Illinois Attorney General Lisa Madigan filed suit against Illinois-based Hartland Mortgage Centers and California-based American Advisors Group for deceptive marketing practices while soliciting seniors for reverse mortgages.

Although substantially all reverse mortgages these days are, in fact, government insured through FHA, they are not a government benefit program nor are they a government entitlement program.

The suit alleges that these two loan brokers sent solicitations that made false claims such as:

“President Obama’s Economic Stimulus Plan Helps Seniors. If you are 62 years of age or older, you may be eligible to take advantage of an important U.S. Government Insured Program”

“The United States Congress has authorized a Reverse Lending program you do NOT have to pay back as long as you live in your home”

The suit also alleges that the brokers misled customers into thinking that the reverse mortgage would only be offered for a short time. Many of the mailers sent by the defendants contained “expiration dates”. Reverse mortgages are a permanent offering with no such expiration date.

The two brokers now face penalties of $50,000 per act, a $50,000 civil penalty, $10,000 for each act perpetrated on a person 65 and older, as well as prosecution costs for the state.

This highlights the need to find a reputable lender if you are considering a reverse mortgage.

Industry self-regulation, government regulations, and oversight by the various attorneys general help make reverse mortgages safe for seniors but it is always important to get the facts from a trusted source before entering into a loan.

For more information, visit AARP or the National Reverse Mortgage Lenders Association websites.

Mark Schmidt has been a reverse mortgage specialist since 2004. In that time, he has guided hundreds of seniors through the reverse mortgage process. He is a veteran in the industry at a time when many others are “jumping on the bandwagon” of reverse mortgages.

A graduate of the University of Illinois, Mark also has an MBA from Loyola University and twelve years as a financial analyst with Merrill Lynch and Bank of America. To understand the needs of his clientele better, he was designated a Certified Senior Advisor in 2007 by completing additional studies of the social, physical, and financial aspects of aging.

Mark is the reverse mortgage expert for www.caregiverlist.com and is the author of “Reverse Mortgages: Facts and FAQs” which was in Amazon.com’s top five list for reverse mortgage books before selling out.

Mark can be reached at 773-504-9633 or email him directly at mark.schmidt@bankofamerica.com.