The state of Massachusetts has sent five firms notices to put an end to their practice of selling reverse mortgages to the elderly. While reverse mortgages are commonly sold to elderly homeowners, the five companies did not have the adequate licenses need to sell in the state, thus making their business practices illegal.
The five companies, which have been identified as Eldervantage LLC, Lender 411 LLC, Senior Reverse Mortgage Online, Reverse Mortgage Help Desk, and Reverse Mortgage Site, are not the only companies who have received cease and desist letters from the state of Massachusetts. In fact, since the state decided to crack down on such unlicensed activity in 2009, more than twenty companies have received similar letters. The state of Massachusetts has made it clear that the actions taken by the companies cannot be considered fraud, though they were illegal according to state law.
The state has made a very concentrated effort in the last two years to prevent unlicensed companies from selling reverse mortgages to senior citizens, as there were various reports of reverse mortgage firms making false and misleading promises in an effort to take advantage of them. While there are no indications that the five reverse mortgage companies that received letters to cease activity were actually those that made misleading promises to the elderly, they were practicing without a license in the state, thus leading to the corrective action that was taken.
Reverse mortgages can be a very beneficial service to some elderly people, as it can provide financial help in dire situations. However, they are usually not recommended, particularly for those homeowners that are elderly.
