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June 29, 2012 – The Consumer Financial Protection Bureau sent a 231-page report to Congress Thursday on reverse mortgages and issued a request for information as it considers the need for future rulemaking.

The CFPB said, inresearching the report,itfoundthat reverse mortgages are complex, difficult for consumers to understand and used increasingly in ways for which they were not intended.

"Nearly half of recent borrowers were in their 60s, and nearly 3 out of 4 borrowers took all of their money upfront in a lump sum," CFPB staffer Megan Thibos wrote in a blog post. "The Bureau is concerned that these borrowers will have fewer resources to pay for everyday and major expenses later in life."

The CFPB says the Dodd-Frank Act authorizes it to implement rules on reverse mortgage transactions. At this stage, it is seeking information for further study. Issues raised for comment include:

• factors that influence reverse mortgage consumers' decision-making;
• consumers' use of reverse mortgage loan proceeds;
• longer-term consumer outcomes of a decision to obtain a reverse mortgage;
• differences in market dynamics and business practices among broker, correspondent and retail channels.

The CFPB says its study identified these as the four major topics where additional research would help determine if additional consumer education or regulatory action is needed.

The CFPB also published a four-page consumer guide to reverse mortgages and added a new set of answers to common questions about the products on Ask CFPB. Consumers can also submit complaints about the products via the bureau's website.

The request for information will be published in the Federal Register; comments will be due 60 days after that.