The Massachusetts Division of Banks has issued four cease and desist orders against licensed mortgage lenders and brokers. Each case involved reverse products that were made in violation of the commonwealth of Massachusetts' reverse mortgage statute. Massachusetts law prohibits a lender from making a reverse mortgage without a plan that has been approved that includes mandatory counseling.
According to the Division of Banks, First Call Mortgage Co. Inc., Sun West Mortgage Co. Inc. and Gold Reverse Inc. were making reverse mortgage loans to Massachusetts seniors without an approved plan. First Call Mortgage was also cited for unfair and deceptive practices for altering mortgage loan documents and misrepresenting applicants' incomes.
All three companies have been prohibited from accepting any new mortgage applications and have been ordered to place all pending applications with a qualified lender at no cost to the consumer. In addition, the firms were ordered to provide the Division of Banks complete copies of files for all reverse mortgage loans.
American Advisors Group, a licensed mortgage broker, also received a cease and desist order for engaging in unfair and deceptive advertising practices involving reverse mortgage products. Specifically, American Advisors Group engaged in a direct mail campaign in which reverse mortgage loans were marketed as government benefits. In addition, the company has been ordered to cease its advertising in Massachusetts and provide the Division of Banks with a complete list of all individuals that received direct mail advertisements.
Source: Massachusetts Division of Banks