A Reverse Mortgage is a type of loan for homeowners 62 years of age or older who have considerable equity in their houses. Typically, borrowers receive periodic payments, e.g., monthly, and/or have access to a line of credit and make no more mortgage payments during their lifetimes. The loan is paid off when the loan holder enters a long term care facility or dies and the house is sold.
What You Need to Know About Reverse Mortgages
- Examining Faulty Foundations in Today’s Reverse Mortgages
Consumers Union of U.S., CANHR, & Fair Lending Project for Seniors Council on Aging Silicon Valley, December 2010
- There’s No Place Like Home: The Implications of Reverse Mortgages on Seniors in California, August 1999, Consumer’s Union
- Reverse Mortgage Suitability – Points to Consider (PDF)
- Reverse Mortgage Suitability Self-Evaluation Worksheet (PDF)
- CANHR’s Consumer Alert: (pdf) Information on typical reverse mortgages
- “Reverse Mortgage Trap” (pdf)
- Treatment of Reverse Mortgages under Medi–Cal (pdf)
- Federal Trade Commission Consumer Fact Sheet – Reverse Mortgages: Get the Facts Before Cashing in on Your Home’s Equity
Where to Report Elder Financial Abuse:
- Consumer Scams: Contact the county office of the District Attorney—check California District Attorney’s Association for current addresses and phone numbers at 916-443-2017 or www.cdaa.org.
- Insurance Agent Complaints: Contact the State Insurance Commissioner’s Office at 1-800-927-4347 or www.insurance.ca.gov. If an attorney sold the annuity, also file a complaint with the State Bar Association at 1-800-843-9053 or www.calbar.ca.gov.
- Attorney Complaints: File a complaint with the State Bar of California if you believe your attorney acted improperly, and file complaints with state https://www.dca.ca.gov/consumers/complaints/consumer.shtml and local consumer protection agencies.
- Mortgage Lenders & Brokers Complaints: If you believe that a real estate professional has committed fraud having to do with your reverse mortgage, file a complaint with the California Department of Real Estate at http://www.dre.ca.gov/consumers/WhoDoYouCall.html. Also file a complaint with the Federal Trade Commission online or by phone, toll–free, at 1–877–FTC–HELP.
- Local law enforcement and county District Attorney’s office – check the California District Attorney’s Association for current addresses and phone numbers at 916-443-2017 or www.cdaa.org.
- Adult Protective Services (APS) in your county by referring to California Department of Social Services Web site at http://www.cdss.ca.gov/Adult-Protective-Services.
- The Consumer Financial Protection Bureau (CFPB)
The Bureau has questions and answers about reverse mortgages at Ask CFPB. The Bureau also has developed a consumer guide for older Americans with key facts on reverse mortgages. Consumers can submit a complaint with the CFPB about reverse mortgages through the web at consumerfinance.gov, by phone at 1-855-411-CFPB or TTY/TDD (855) 729- 2372, or by mail.
National Consumer Law Center (http://www.nclc.org)
- Reverse Mortgages: Spending the House, A Quick Guide for Advocates on Reverse Mortgages; Tips for Consumers on Reverse Mortgages with CD-Rom
- Predatory Lending: STOP Predatory Lending: A Guide for Legal Advocates with CD-Rom
- Home Made Money: A Consumer Guide to Reverse Mortgages and other resources on reverse mortgages
Fannie Mae (www.fanniemae.com)
- Money from Home: A Consumer’s Guide to Reverse Mortgage Options and other information on the Home Keeper Program
Housing and Urban Development (HUD): Counseling Clearinghouse
Reverse Mortgage & Medi-Cal:
Medi-Cal Eligibility Manual, 9D-1 to 9 D-3
Covers loans requiring repayment, i.e., commercial, personal, Home Equity Conversion Plans (Reverse Mortgages, Deferred Payment Loan)
California Code of Regulations
Title 22 Section 50483 – Loans requiring repayment, and not school related (50533), are considered exempt as property in the month of receipt, not income.
Title 22 Section 50507(a)(2): Reverse annuity mortgages are considered annuities and treated as countable income.