Reverse-mortgage lenders ordered to cease Mass. activities

BOSTON – The Mass. Division of Banks last week announced that cease-activity directives had been issued to five entities for marketing reverse mortgages to Massachusetts consumers.
The five companies, Eldervantage LLC, Lender 411 LLC, Senior Reverse Mortgage Online, Reverse Mortgage Helpdesk, and Reversemortgesite, were not approved to sell reverse mortgages in Massachusetts. The actions follow similar enforcement actions the Division of Banks has taken over the past three years in the area of unfair and deceptive advertising practices.
Reverse mortgages are a type of mortgage loan for senior citizens age 62 and older, which pays a homeowner loan proceeds drawn from accumulated home equity. No repayment is required until the borrower no longer uses their home as a principal residence. Interest on a conventional loan is calculated as simple interest, while on a reverse mortgage the interest is calculated as compound interest.
Under Massachusetts law, all banks, credit unions and mortgagees, including federally chartered banks and credit unions intending to make reverse mortgages, must have their program meet specific, state-approved criteria.
“None of these companies are approved as reverse-mortgage brokers or mortgage lenders in Massachusetts and offer incomplete and misleading information,” Commissioner of Banks David Cotney said in a statement. &#8226