Some lenders have announced expansions. Reverse mortgages support MetLife Inc.'s global mission to provide retirement solutions for older Americans, MetLife's Dickson declares. "We advocate that any consumer and/or their financial advisor or elder law attorney needs to consider it in the context of what's in the best interest of the client," he says.

MetLife has been providing continuing education credits on reverse mortgages to more than 850 financial advisors since February. "We just had 500 financial advisors sign up for a [telephone] call we held in June for Social Security."

Dickson stresses, though, that even though MetLife Inc.'s main business is insurance, it does not cross-sell annuities or insurance to reverse mortgage borrowers. That practice has come under scrutiny by regulators.

Financial planners cannot receive compensation for referring clients for reverse mortgages, says NRMLA's Bell. HUD rules also set firewalls and other safeguards to avoid hard sells of any other financial or insurance products to senior reverse mortgage borrowers. At the time of application, Bell adds, a reverse mortgage borrower is asked if there are plans to purchase an annuity. If so, Federal Reserve regulations require lenders to disclose the cost of the annuity along with the total costs of the reverse mortgage.

Some problems, Bell says, relate not to lenders or mortgage brokers, but to independent "lead generation companies" that don't sell reverse mortgages yet still get referral fees for business. A couple of states, including Massachusetts, he says, require a lead generator to be licensed as a mortgage broker or lender.

The Massachusetts Division of Banks, claiming misleading marketing of reverse mortgages, recently ordered five unlicensed companies to cease and desist. Meanwhile, California in September adopted a law, AB 793, which it says expands firewalls for reverse mortgage originators, outlined in HUD Letter 2008-24, to insurance brokers and insurance agents.

The newly established federal Consumer Financial Protection Bureau, charged with regulating reverse mortgages, is required by the Dodd-Frank Act to provide an analysis of reverse mortgages in July 2012. Bell estimates that 70% of the reverse mortgages that are in technical default involve amounts of $5,000 or less, and lenders are working with borrowers to get current. Some problems, he says, stem from insurance companies pulling out of natural disaster-prone areas.

Leah Auricchio, a CPA and mortgage originator with Open Mortgage LLC in Austin, Texas, predicts 70% of retiree home owners ultimately will need to monetize their homes. Auricchio has been using the reverse mortgage as a financial planning tool for nearly a decade.

But she warns that many mortgage brokers in the last several years have entered the reverse mortgage business without completely understanding the product. One client she was about to see, for example, was shortchanged on the amount he should have received from a reverse mortgage. Reason: His house was appraised at just $52,000 instead of $95,000, because, she says, the appraiser used only three comparables and all were foreclosures. Using foreclosures in an appraisal, she says, lowers the amount a client can receive on a reverse mortgage and violates HUD rules.

Auricchio says she has seen the profile of the reverse mortgage borrower change in the last two years from a widow about 75 years old to couples around age 63. There also have been higher HECM lending limits-$625,500-at least through year-end. "So," she says, "there now are $1 million homes doing reverse mortgages."

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