The FFIEC released proposed guidance on reverse mortgage products for comment. The guidance covers the compliance and reputation risks raised by reverse mortgage lending. The proposal addresses the general features of reverse mortgage products, relevant legal requirements and consumer protection issues. The proposal focuses on the need for banks to provide clear and balanced information to consumers about the risks and benefits of these products. According to the proposal, this information should be provided while consumers are making decisions about these products and should address the specific matters listed in the guidance, including informing consumers of available alternatives to reverse mortgages. The proposal also states that banks should require that consumers receive independent counseling and take steps to avoid any appearance of a conflict of interest. Comments must be received 60 days from publication in the Federal Register. Click here for the proposal.
Alert December 29, 2009