The Commonwealth of Massachusetts has ordered five online firms that originate reverse mortgages to stop doing business in the state.
Cease activity directives were issued to the five firms, according to an announcement Friday.
The move was part of a crackdown on deceptive advertising practices.
The state’s Division of Banks said in the news release that reverse mortgage programs from financial institutions and mortgagees need to be approved by the state and meet the requirements outlined in Massachusetts General Laws Chapter 167E, Section 7.
But none of the firms — Eldervantage LLC, Lender 411 LLC, Senior Reverse Mortgage Online, Reverse Mortgage Helpdesk and Reversemortgesite — were approved to sell reverse mortgages in Massachusetts.
“These entities collected personal information via the Internet, made misleading statements about home ownership of homes, gave inaccurate information concerning the complexity of the product, and gave assurances of legal compliance with applicable regulations, where they were not,” the statement said.
The Division of Banks said it plans to file new regulations this month in conjunction with new consumer protections on reverse mortgages signed into law a year ago by Gov. Deval Patrick. The protections cover reverse mortgage counseling and opt-in requirements.
“The Division of Banks will continue to aggressively identify and pursue unlicensed entities and educate consumers of the dangers of conducting business with such unverified companies,” Massachusetts Commissioner of Banks David Cotney said in the announcement.
