Actor Tom Selleck can be seen on television telling senior citizens that reverse mortgages are a safe way to borrow money.
New York state doesn’t agree with the company paying Selleck.
Gov. Andrew Cuomo signed A.5626/S.4407 into law last week to impose greater regulations on reverse mortgage companies in New York state.
The legislation passed the state Assembly unanimously while the state Senate approved the legislation 59-2.
“Reverse mortgages are complicated and expensive financial products,” wrote Assemblywoman Helene Weinstein, D-Brooklyn. “Many seniors do not understand how they work or what their true longterm costs are. Exacerbating this problem are unscrupulous lenders who market reverse mortgages as public services or government-sponsored products. Inadequate regulation of this industry resulted in a sharp uptick in defaults in 2016, as more seniors fell into foreclosure on these products, losing not only their homes, but also their most significant financial assets.”
The new state regulations prevent reverse mortgage companies from marketing their product as a public service, a government-sponsored program or anything other than a commercial product.
Lenders won’t be allowed to engage in “deceptive” practices in connection with marketing or offering reverse mortgages and lenders must provide a consumer protection information sheet that the state will create with any solicitation materials sent to anyone in New York state.
Lenders will also have to…