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Reverse mortgage provider settles claim over misleading advertising targeting seniors

NEW YORK - Attorney General Eric Schneiderman announced a settlement with New View Mortgage Corp. arising from misleading direct mail solicitations sent to nearly 10,000 New York seniors. The solicitations, advertising reverse mortgages, were designed to look like official government notices from the Federal Housing Administration. Solicitations were mailed in envelopes that read, ‘Economic Stimulus Notice’ and ‘Government Lending Division,’ and the body of the solicitation identified the sender as ‘Federal Housing Administration Home Benefit HECM Program.’ As part of the settlement, the company must pay a penalty of $12,500 and may not misrepresent the features, benefits, and eligibility requirements of reverse mortgages in future solicitations.

“Making New York more affordable for the middle class includes protecting consumers from false and misleading advertising practices,” said Schneiderman. “Our office will hold companies accountable when they seek to rip off or defraud seniors and require them to comply with the letter of the law.”

The solicitations sent by New View Mortgage contained a section called “Facts you need to know” about the HECM mortgages. However, these “facts” presented only the benefits of reverse mortgages and none of the risks. For example, the solicitation emphasized “No Monthly Mortgage Payments Required Ever!” but failed to disclose that consumers who enter into reverse mortgages continue to be responsible for tax and insurance payments. The solicitations also stated that “Your Heirs WILL inherit all remaining equity” but failed to disclose that heirs have to pay off the reverse mortgage loan in order to keep the home. While reverse mortgages may allow seniors to stay in their home without making mortgage payments, they are not necessarily the best option for all homeowners. Fees and other charges can be high in some cases. There are often less costly and more appropriate options available. 

New View Mortgage Corp. is a mortgage broker and banker located in Woodbury, New York.