Older borrowers deserve to know their options before getting a traditional mortgage

Whether it is due to over-regulation, the sheer size of our housing bureaucracy, or crony capitalism, the mortgage marketplace is not a level playing field, especially when it comes to traditional and reverse mortgage lending. Despite the creation of the Consumer Financial Protection Bureau and other agencies created to protect consumers in the wake of the housing crash and questionable lending practices, problems remain.

Chief among those problems is the continuing lack of disclosure to older borrowers who cannot afford to choose the wrong mortgage option.

A level playing field in the mortgage marketplace is a noble concept that would place each player in a position to have an equal chance at succeeding abiding by the same set of rules. Unfortunately, such an aspiration is highly impractical in the mortgage marketplace as loan product features and risks vary wildly. Regardless, perhaps improved disclosure requirements should be required for traditional mortgage lenders, brokers and loan officers, just as HECM professionals will be required to disclose “all HECM products, features, and options that FHA insures.” Such a requirement may have prevented an 82 year old woman with a meager income and a part-time job from being placed into a 30-year mortgage- who a short time later lost her job and is now facing foreclosure.