The reasons are as follows:

HUD said its Mortgage Review Board alleges that Financial Mortgage USA failed to:

— Implement Federal Housing Authority-required quality control plans.

— Separate its lending operations from those of its affiliated insurance company.

— Conform to prudent lending practices.

— Properly provide borrowers with housing counseling services.

With all the noise about reverse mortgages and with so much of it negative, I think its really important to pay attention to who you’re getting your loan from and be sure to shop around.  A reverse mortgage in of itself might be a great thing depending on your situation.  However, anybody selling loans stands to make a lot of money .  Whenever that happens, they can mislead you without breaking the rules in many ways.  Just be careful and if you have questions bring some family members into the picture.  I was on phone calls with my parents and the lenders during the process to make sure I caught any BS or misleading statements.  I also had the opportunity to ask my questions.

Fortunately, in the wake of all the horrible lending practices in the last decade people are more wary (hopefully) and it looks like the FHA has their eye on the ball as well.

I just read a great post by Dennis Haber over at the reverse mortgage blog stating:
“The reverse mortgage industry has been under siege by respected magazines and Newspapers (Consumer Reports, CPA Journal, New York Times, Wall Street Journal, etc.) and by the National Consumer Law Center. The amazing fact is that the reverse mortgage program depicted in the articles does not resemble the actual program.”

Dennis goes on to discuss the fact that this type of publicity and in essence “slander” against the entire program not only misleads the public and in fact may cause somebody to turn their back on one of the few things out there that might actually help them.

The thing is, when you get down and crunch numbers a reverse mortgage making sense can become very black and white.  There are a few things to factor in that aren’t so clear but like many financial decisions, if you just take everything into account sometimes what sounds like a tough decision becomes very easy…one way or another.   I think there should be easier ways to factor in ones personal finances but as with any type of loan or banking situation, the waters become cloudy very quickly and often on purpose.  That being said, this is nothing specific to the mortgage industry, just money matters in general.  IMHO.