State Regulators Have Their Eye on Reverse Mortgage Lenders

The U.S. population is aging, and one of the well-established components of the American dream — buying and owning a home — appears poised to aid in the baby boomers' next phase of life. In fact, an increasing number of older Americans are expected to tap into their home equity to fund their living expenses through the use of reverse mortgages.

With this expansion, reverse lenders and servicers can expect regulator attention, as their operations are clearly on the radar. Although, at the federal level, the Department of Housing and Urban Development, Consumer Financial Protection Bureau and Federal Trade Commission continue to regulate reverse mortgage lenders' activities, the states are increasingly getting into the game. The result is a complex, and sometimes conflicting, sea of rules through which reverse mortgage brokers, lenders, servicers and investors must navigate.