NEW LETTER: Harder Targets Bad Actors in the Housing Market for Additional Penalties

WASHINGTON — Today, Representative Josh Harder (CA-10) sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra urging the agency to increase penalties for bad actors in the housing market. The letter specifically calls out the American Advisors Group (AAG), the largest reverse-mortgage lender in the nation, who faced a civil money penalty of just $1.1 million after being caught in a nationwide scheme targeting senior citizens. AAG has reported annual revenue of more than $280 million in recent years.

"Our community is facing a crisis of affordable housing, and fraudsters in the market are only making it worse," said Rep. Harder. "A fine of less than half a percent of recent revenues for the most dominant company in the space ripping off our seniors feels like a slap on the wrist for a bank heist. I'm calling on the CFPB to ratchet up penalties to make sure nobody is stealing from our seniors."

AAG was penalized for sending mail to seniors' homes with both "deceptively inflated home values" and "deceptive representations about the accuracy of home estimates" in order to "lure consumers into taking out reverse mortgages" said the CFPB. AAG has reported annual revenue of more than $280 million in recent. A $1.1 million fine would only be 0.35% of the company's yearly revenue.

Read the letter below and online here:

Dear Director Chopra,

I write today to shed light on the various corporations using deceptive practices in the housing market and urge the Consumer Financial Protection Bureau (CFPB) to take action to address these issues.

Reverse mortgages offer a lifeline to senior homeowners by giving them an additional income to help them through emergencies or compensate for a fixed income. But deceptive and manipulative practices, such as inflating home prices and false advertising have turned this safety net into a trap. Most recently, American Advisors Group (AAG) inflated home estimates, resulting in many seniors entering into negotiations and paying out of pocket for home appraisals only to then learn that they won't actually get as much money as they were originally made to believe. Our seniors are already one of the most vulnerable populations and many are already facing financial insecurity. Scams such as these are a threat to seniors and must be punished by CFPB to the fullest extent.

Repeat offenders such as AAG have shown that a slap on the wrist from CFPB is not enough to stop bad actors and their fraudulent practices. Moving forward, I urge you to impose more severe penalties for reverse mortgage lenders that prey off of vulnerable populations, especially for repeat offenders such as AAG.

I look forward to your timely attention to this critical matter.

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