US Regulators Warn: Ads for Reverse Mortgages Can Mislead

We’ve seen the TV ad pitches from celebrities like “The Fonz” Henry Winkler and actor and ex-senator Fred Thompson, touting the benefits of reverse mortgages for older homeowners.

In this Thursday, Sept. 11, 2014 photo, Myles Griffin, 74, poses for a photograph in front of his home in Philadelphia. Griffin has lived with his wife for 40 years in their three-bedroom row home and after retiring three years ago, the couple signed up for a reverse mortgage in May. AP Photo/Matt Rourke

WASHINGTON—We’ve seen the TV ad pitches from celebrities like “The Fonz” Henry Winkler and actor and ex-senator Fred Thompson, touting the benefits of reverse mortgages for older homeowners.

Now U.S. regulators are warning: Don’t be fooled. Many ads don’t tell the whole story about reverse mortgages.

The Consumer Financial Protection Bureau said Thursday that a study it conducted with older homeowners found they were given the false impression by the ads that reverse mortgages are a government benefit and ensure consumers can stay in their homes for the rest of their lives.

Most of the 97 different TV, radio, print, and online ads reviewed by the CFPB failed to mention the risks of reverse mortgages.