ASIC has issued a series of fact sheets on equity release products.

The Australian Consumers’ Association has released a report.

The ACA wants state governments to introduce uniform reverse mortgage laws in order to force the industry to standardise its contracts and address problems it found.

It argues that a  new regulatory framework is needed to ensure:

• Separate contracts for reverse mortgages instead of an add-on section in a general home loan contract.
• Contracts are written in plain English
• A cooling-off period
• Default conditions are only in place for serious contract breaches.
• The ‘No Negative Equity Guarantee’ is very clearly spelled out in the contract and should only be conditional on serious breaches of the contract. It should cover the net proceeds of the house in an orderly arm’s length sale.
• All lenders and other companies dealing with the consumer about the loan, such as mortgage brokers and mortgage managers, are members of approved external dispute resolution schemes
• Licensing of mortgage brokers, especially if they’re dealing with reverse mortgages, to help ensure that consumers receive proper and complete advice.