AAG Reverse Mortgage Lawsuit: Federal Charges Filed Over Deceptive Practices

The US Department of Justice has filed a lawsuit against American Advisors Group (AAG), a leading reverse mortgage lender, alleging deceptive practices in the marketing and sale of its reverse mortgages.

AAG was accused of making false claims about the benefits of its reverse mortgages, including that they would not require monthly payments or that they would not affect Social Security benefits.

The lawsuit claims that AAG's practices led to numerous homeowners being misled about the terms and conditions of their reverse mortgages, resulting in financial harm.

The federal charges highlight the importance of thoroughly understanding the terms and conditions of any financial product before making a decision.

Tom Selleck's company, American Advisors Group (AAG), has been accused of lying to consumers about reverse mortgages.

AAG allegedly provided consumers with inflated estimates of home values to entice them to enter into negotiations for a reverse mortgage. This was deceptive because it led consumers to believe they could reap more proceeds from the mortgage than were actually available.

The Consumer Financial Protection Bureau (CFPB) filed a complaint against AAG for violating a 2016 administrative consent order. The order prohibited AAG from making deceptive statements in their marketing materials.

AAG's marketing materials claimed they made every attempt to ensure the home value information provided was reliable. However, the CFPB found that AAG made no real attempt to do this.

As a result of their deceptive practices, AAG agreed to pay $1.1 million to settle the suit. This is not the first time AAG has been in trouble for their marketing practices. Last year, they paid $3.5 million to settle a class action lawsuit for harassing consumers with prerecorded telemarketing calls.

The CFPB took action against American Advisors Group (AAG) for deceptively marketing reverse mortgages to consumers.

The CFPB filed a complaint and proposed consent order alleging that AAG used inflated and deceptive home estimates to lure consumers into taking out reverse mortgages.

AAG is one of the nation's leading providers of reverse mortgages, which allow homeowners 62 or older to access the equity in their homes and defer payment of the loan until they pass away, sell, or move out.

The proposed consent order would prohibit AAG from future unlawful conduct and require AAG to pay $173,400 in consumer redress and a $1.1 million civil money penalty.

The CFPB claimed that AAG's alleged use of inflated home values and false representations about its efforts to ensure home value information is reliable constituted deceptive acts or practices in violation of the CFPA.

AAG must submit a compliance plan to the CFPB and include links to specific CFPB materials about reverse mortgages in its direct mail solicitations and in welcome communications to borrowers with newly-originated reverse mortgages.

The CFPB alleged that AAG's deceptive conduct violated a 2016 administrative consent order that addressed AAG's deceptive advertising of reverse mortgages.

In 2016, the Bureau entered into a consent order with AAG to settle claims that AAG engaged in deceptive advertising in violation of the Mortgage Acts and Practices-Advertising Rule (Regulation N) and the Consumer Financial Protection Act.

The consent order contained a provision prohibiting AAG from violating the CFPA for five years, or until December 2021, and required AAG to pay a civil money penalty of $400,000.