Passage 8

The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.Reverse mortgages,which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die,have long been fraught with problems.But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers,including former subprime lenders,flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them,not to mention the property taxes and maintenance.Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises,without clearly explaining the risks.Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.

Now,as the vast baby boomer generation is entering retirement and more seniors struggle with declining savings,the newly minted Consumer Financial Protection Bureau is working on new rules that could mean better disclosure for consumers and stricter supervision of lenders.More than 775,000 of such loans are outstanding,according to the federal government.

Concerns about the multibillion-dollar reverse mortgage market echo those raised in the lead-up to the financial crisis when consumers were marketed loans—often carrying hidden risks—that they could not afford.“There are many of the same red flags,including explosive growth and the fact that these loans are often advertised aggressively without regard to suitability,”said Lori Swanson,the Minnesota attorney general,who is working on reforming the reverse mortgage market.

What can we learn about mortgage loans from the first paragraph