WASHINGTON (2/11/15)--Unfriendly loan terms, servicer runarounds and foreclosure problems highlight consumer complaints about reverse mortgages, according to a report issued Tuesday by the Consumer Financial Protection Bureau (CFPB).
A reverse mortgage is a type of home loan that allows older homeowners to access the equity they have built up in their homes and defer payment of the loan until they die, sell the home or move out. The bureau cites industry reports that estimate reverse mortgages make up roughly 1% of the traditional mortgage market, with around 628,000 outstanding loans.
The CFPB's report analyzed 1,200 reverse mortgage complaints received by the bureau between Dec. 1, 2011, and Dec. 31, 2014.
The top complaints included:
The bureau also published a blog post for those who have reverse mortgages, designed to help consumers avoid the complaints highlighted in the report.