At the National Reverse Mortgage Lenders Association (NRMLA), we are constantly monitoring reverse-mortgage advertising. We recently came across some troubling new ads for reverse mortgages created by a financial firm that is not a member of our association.

The ads in question make the purchase of an additional financial product a condition for obtaining a reverse- mortgage loan. This is something we staunchly advocate against, and it clearly violates our organization’s ethical standards.

Rest assured that we review all ads referred to our organization, such as the one mentioned above, and if we deem them to be inappropriate, refer them to the proper authorities.

Properly managing your reverse-mortgage proceeds is of vital importance to borrowers. Just because you have accessed the equity in your home and now have money available does not mean you should spend it without careful planning. Reverse mortgages are viable and accessible options for helping to fund your later years, but, like all money, the loan proceeds must be treated with care.

As with any financial product, there are always scammers and fraudsters looking to take advantage of those who have money available. A recent MetLife Mature Market Institute survey of seniors reported that five percent had suffered some kind of financial abuse. Among those who have been abused, two-thirds are women, mostly between 80 and 89 years of age. NRMLA is devoted to making sure your borrowing experience is not tainted by less-than-forthright sales or other people.

It’s important to understand what to look out for, so that in the event you find yourself in an uncomfortable situation – such as being pressured to purchase other financial products – you know to walk away.

Under no circumstances can a NRMLA member suggest or require that another product or service, other than the reverse mortgage loan itself, be purchased in order to obtain the reverse-mortgage loan. This includes the sale of such products as annuities or investment products, as well as life or long-term care insurance. Our NRMLA code of ethics refers to this as a prohibition against cross selling.

The purchase of any additional financial product with reverse-mortgage proceeds should only be considered as part of an overall financial plan. NRMLA recommends that borrowers consult a financial planner or trusted family member to help them devise a comprehensive budget plan before making any long-term financial decisions. Calculate your income and expenses in detail. Decide how best to utilize your reverse mortgage proceeds. Don’t let anyone talk you into using your proceeds for something else.

For example, for a borrower who needs to use a reverse mortgage to support monthly expenses, other financial products could be completely inappropriate. Take a deferred annuity as proof positive of this fact. In a deferred annuity, a person could have limited or no access to cash until they are well past retirement age. But this would wipe out the reason you took out the reverse mortgage in the first place.

Reverse mortgage borrowers must also ensure they protect their funds from fraudulent activities. Some suggestions:

• NEVER disclose your bank account information, routing number, or ATM PIN over the Internet.
• Check with family and friends before responding to any Internet solicitation.
• Please make absolutely certain that you do not make any contributions to charitable or

other organizations that call you without thoroughly checking out their legitimacy.

• Finally, look for the NRMLA logo when evaluating lenders. When dealing with our members, you can be sure that you are dealing with an organization held to the highest ethical standards.

For many people, the equity in your home is your last source of a large amount of cash. Treat it that way.

Peter Bell is the president of the National Reverse Mortgage Lenders Association.