Seniors face predatory Reverse Mortgage Lenders

Predatory lending practices that produced the subprime mortgage meltdown have cropped up in the reverse mortgage market, where seniors are being targeted, putting their equity and savings at risk, according to a new report.

Reverse mortgage lenders are using financial incentives to reward brokers for deals that boost lenders’ profits and raise borrowers’ costs in much the same way subprime mortgage lenders did, notes the report released by the National Consumer Law Center.

U.S. Sen. Claire McCaskill (D-Mo.), said “We’ve seen this movie before, and it didn’t have a pretty ending. Abuses in the subprime lending market almost brought down our economy. Now we’re seeing similar abuses with reverse mortgage lending. Something needs to be done before more life savings are depleted and more tax dollars are drained.”

Source: Sun Times

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