Class Action Blog : Class Action Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz : Consumer fraud, Personal Injury

A reverse mortgage can be a valuable means of support for a senior citizen, allowing the homeowner, aged 62 or higher, to pull equity of his or her home.  The money can come as a one- time payment, in monthly installments or as a line of credit to be drawn on when needed.  The mortgage is repaid when the senior sells the residence or after his or her death by the heirs.

The maximum allowed on a reverse mortgage is $625,000 and more than 110,000 such loans aggregating more than $17 billion are entered into annually by America’s senior citizens, according to the National Consumer Law Center.  Such a large financial market inevitably attracts abuse, however, and predatory lending practices have begun to emerge in reverse mortgages.  Loan brokers might use high pressure tactics on the unwary senior and fail to evaluate the appropriateness of the loan in an effort to secure commissions.  Similar to the disastrous subprime mortgage collapse, financial institutions have been passing on the risk inherent in these loans to other investors, thus attempting to insulate themselves from the potential consequences of granting high risk loans at a time when housing prices are still unstable.

In addition, predatory loan brokers may package other financial products or insurance into the reverse mortgage to generate additional revenue for themselves.  Since reverse mortgages are explicitly aimed at senior citizens, the potential always exists that the aging homeowner may not be able to make the best decision when confronted with the combination of financial needs, high pressure sales and confusing documentation.  In some cases, the senior may put their title to their home in jeopardy without realizing it.

If you think you or a member of your family may have fallen victim to a predatory reverse mortgage, please contact us to discuss your legal options.

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A Senate inquiry has found evidence that AARP’s health insurance products were deceptively marketed to its members. At issue are insurance plans that were sold by UnitedHealth Group and carry the AARP brand. According to the New York Times, more than a million people have bought the policies, which have names like AARP Medical Advantage, Essential Plus and Hospital Indemnity Plan. The Senate Finance Committee found the marketing of these health insurance policies misleading because it suggested that they offered comprehensive coverage. In fact, the policies pay fixed cash benefits for selected services, often times much less than consumers had been promised or expected.

For example, AARP’s Medical Advantage plan pays a maximum of $5,000 for surgical procedures that usually cost many times that amount. A consumer guide to this plan issued by AARP states that a Medical Advantage insurance policy “can be a real lifesaver for early retirees, part-time workers or people who just need to supplement their current health insurance.” Thus, uninsured members of AARP have purchased these policies thinking that they provide comprehensive medical coverage, when in fact they do not.

In response to the Congressional inquiry, AARP has suspended sales of the health insurance policies and has hired an outside investigator to look into sales of these policies.

If you have a purchased a limited-benefit health insurance policy through AARP, please contact us to discuss your legal options.

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