Melissa Bouillon
Accounting for Non-Financial Majors
Financial Literacy Paper
September 26, 2017
Reverse Mortgage- Saving or Scamming Seniors?
If you have ever turned on the television and seen and advertisement for a reverse mortgage; than you
can agree that many of these advertisements are joyful and embody youthful seniors having the ability
to travel and follow their passions without having the financial constraints of a monthly mortgage
payment. Reverse mortgages are advertised as a way for seniors, most of who live on a fixed income to
establish financial freedom while keeping and getting to live in their home and pursuit their passions.
Reverse mortgages have been on television, radio, digital print and in print; but according to the
Consumer Financial Protection Bureau (CFPB) many seniors feel like these ads are misrepresentations.
(CFPB, 2015) Based on a study from the CFPB seniors found advertisements to be misleading, difficult to
understand, and gave a false impression of financial freedom. (CFPB, 2015) The study was based on
television, radio, digital and print advertisements. The study also revealed most advertisements were
incomplete or listed inaccurate information. There are also misrepresentations of government affiliation
with the program that led many elderly homeowners to believe that access their home’s equity interest
free with a reverse mortgage. These advertisements also do not disclose that if the consumer happens
to fall behind in property taxes or home owner’s insurance your loan could default causing loss of the
home. Consumers should also be aware that most lenders do not advertise is that the interest rate for
