The Consumer Financial Protection Bureau is warning seniors not to be taken in by what they called deceptive “reverse-mortgage” advertisements that the consumer agency says often claim the mortgages are backed by the federal government or hide the fact they still have to repay the balance of their loan.

The CFPB said that in a recent agency study of the nearly 100 advertisements it looked at and showed to a panel of seniors, many did not understand that the reverse mortgages were loans with fees and interest, while others assumed the money represented the home’s equity that they didn’t have to pay back. Many of the ads themselves didn’t include information on interest rates, or buried it in the fine print, the agency said. Earlier this year, the CFPB sanctioned a company for using a logo similar to the Great Seal of the United States and a mailer reading “Government Lending Division” giving the impression to potential borrowers that the company or loan was backed by the feds, the CFPB claimed.

“Incomplete or inaccurate information in a (reverse mortgage) ad can cause older Americans to make the wrong choice that jeopardizes their financial security,” said CFPB Director Richard Cordray in a conference call with reporters. “They could run out of money for their day-to-day expenses or they could even lose their homes,” he said.

Reverse mortgages work by allowing borrowers over a certain age to tap equity in their homes without having to make monthly mortgage payments like a traditional home equity loan. Instead of paying down the loan, the repayment is deferred until the borrower dies or moves out of the house. Still, the CFPB said that many seniors don’t know that they’re still on the hook for property taxes, homeowners insurance and maintenance, and that they can run out of equity and still be foreclosed on.

The CFPB says there are about 628,000 reverse mortgages in effect in the U.S., just 1% of the traditional mortgage market, but that is expected to grow as the more than 45 million Americans over the age of 65 need to tap their home’s equity for expenses like nursing home care.

Source ：http://www.marketwatch.com/story/cfpb-warns-seniors-on-reverse-mortgage-advertising-2015-06-04