FTC & Reverse Mortgages

The Federal Trade Commission, which sells nothing, has an excellent online discussion of reverse mortgages.

Why shop with care for a reverse mortgage?

“HECMs and proprietary reverse mortgages tend to be more costly than other home loans,” says the FTC. ”The up-front costs can be high, so they are generally most expensive if you stay in your home for just a short time.”

The FTC also makes these points.

*If you are interested in a federally-insured HECM, know that all HECM lenders must follow HUD rules, and that many of the loan costs including the interest rate will be the same no matter which lender you select. Still, some costs including the origination fee, other closing costs, and servicing fees may vary among lenders.

*No matter which type of reverse mortgage you are considering, be certain you understand all the conditions that could make the loan due and payable. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates, which show the projected annual average cost of a reverse mortgage, including all itemized costs.

*If you suspect that anyone is violating the law, let the counselor, lender, or loan servicer know. Then file a complaint with your state Attorney General’s office or state banking regulatory agency. You can file a complaint withe the FTC online at ftc.gov or by phone, toll-free, at 1-877-FTC-HELP (1-877-382-4357).

This entry was posted on Thursday, July 5th, 2007 at 2:20 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.