Missouri Sen. Claire McCaskill warned Tuesday that aggressive marketing of reverse mortgages to seniors could be the nation's next financial fiasco if Congress doesn't enact legislation to bolster consumer protections and curb potentially abusive practices.
Most reverse mortgages are government-insured loans that enable seniors to convert part of the equity in their homes into tax-free income without having to sell the home, give up the title or take on a new monthly mortgage payment.
While reverse mortgages can help seniors who need additional income in retirement, they can be complicated and may not be the best choice for everyone.
A recent boom in the industry combined with aggressive marketing to a vulnerable population should make "everybody's antenna" stand up, McCaskill said.
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McCaskill Warns About Marketing Reverse Mortgages to Senior Citizens