**GAO-09-606**                      Published: Jun 29, 2009. Publicly Released: Jun 29, 2009.                  

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## Highlights

Reverse mortgages--a type of loan against the borrower's home that is available to seniors--are growing in popularity. However, concerns have emerged about the adequacy of consumer protections for this product. Most reverse mortgages are made under the Department of Housing and Urban Development's (HUD) Home Equity Conversion Mortgage (HECM) program. HUD insures the mortgages, which are made by private lenders, and oversees the agencies that provide mandatory counseling to prospective HECM borrowers. GAO was asked to examine issues and federal activities related to (1) the potential benefits and costs of HECMs to borrowers, (2) misleading HECM marketing, (3) the sale of potentially unsuitable products in conjunction with HECMs, and (4) oversight of HECM counseling providers. To address these objectives, GAO reviewed program rules; examined HECM advertisements; analyzed consumer complaint data; performed limited tests of HUD's internal controls; and interviewed HECM borrowers and agency, industry, and nonprofit officials.

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## Topics

Business Regulation and Consumer Protection

Bank loansBanking lawBanking regulationClaimsConsumer protectionElderly personsExpense claimsFederal agenciesFederal regulationsHousingHousing programsInsurance premiumsInterest ratesInternal controlsLending institutionsMarketingMortgage loansMortgage programsMortgage protection insuranceRegulatory agencies