Fed Says Reverse Mortgage Loans Pose Risks

The Federal Reserve and other top regulators said on Monday reverse mortgages pose "compliance and reputation risks" for lenders, and offered guidance to financial firms on how to avoid such pitfalls.
"Reverse mortgages present substantial risks both to institutions and to consumers, and, as with any type of loan that is secured by a consumer's home, it is crucial that consumers understand the terms of the product and the nature of their obligations," the regulators said in a statement.
"Lenders must institute controls to protect consumers and to minimize the compliance and reputation risks for the institutions themselves," they said.