Illinois AG Targets Pair Of Mortgage Brokerages For Alleged Use Of Deceptive Marketing Practices In Peddling Reverse Mortgages To Seniors

From the Office of the Illinois Attorney General:

• Attorney General Lisa Madigan [...] filed lawsuits against two mortgage brokers for using unfair and deceptive marketing practices to solicit seniors for reverse mortgages. “These companies used extremely misleading language in their advertising, sometimes even disguising their loans as government benefits that borrowers don’t have to repay,” Madigan said.

• “Many consumers have reported that they didn’t even know these offers were for reverse mortgages or a loan of any kind. That is unacceptable. Reverse mortgages are complex loans that should be taken out only after a consumer has had an opportunity to carefully consider his or her financial future and consult with a qualified housing counselor.”(1)

For the Illinois AG press release, see Madigan Sues Two Reverse Mortgage Brokers for Using Deceptive Marketing Practices To Target Seniors.

See also, Courthouse News Service: Illinois Company Scams Seniors, State Says.

For one of the lawsuits, see The People of the State of Illinois v. Hartland Mortgage Centers, Inc. (available online courtesy of Courthouse News Service).

(1) Madigan lawsuits targeted Woodridge, Ill.-based Hartland Mortgage Centers, Inc. (filed in Cook County) and Irvine, Calif.-based American Advisors Group, Inc., and its company president, Reza Jahangiri (filed in Sangamon County). Among the allegations made in the lawsuits is the use of solicitations that:

• make a series of claims that falsely imply that seniors could be eligible for lifetime monthly income or lump-sum payments that are part of government benefit programs offered to all seniors. In fact, however, the defendants are offering loans that must eventually be repaid,

• include false claims such as: “President Obama’s Economic Stimulus Plan Helps Seniors. If you are 62 years of age or older, you may be eligible to take advantage of an important U.S. Government Insured Program” and “The United States Congress has authorized a Reverse Lending program you do NOT have to pay back as long as you live in your home!”,

• mislead consumers into believing that the reverse mortgages would only be offered for a short time, with many of the defendants’ mailers including purported “expiration dates.”