A newly filed class-action complaint accuses several of the country’s largest reverse-mortgage servicers of charging older homeowners fees that federal rules and the loan contract prohibit. The suit, which the AARP Foundation has joined, alleges the companies routinely added charges that quietly stripped equity from borrowers already living on fixed incomes. None of the allegations have been proven, and no court has found any company liable. For the tens of thousands of households the plaintiffs say were affected, the amounts at issue run into thousands of dollars each.
The class action against Celink, Finance of America and Carrington
According to the AARP Foundation, which announced its involvement on January 29, 2026, attorneys for the foundation and the law firms Tusa P.C. and Giskan, Solotaroff & Anderson filed a class-action complaint in the United States District Court for the Eastern District of New York against Compu-Link Corporation, known as Celink, along with Finance of America Reverse and Carrington Mortgage Services. A related amended complaint in the case captioned Dancy-Wilkins v. Compu-Link Corporation added Longbridge Financial as a defendant. The named plaintiffs are homeowners and the estates of homeowners from New York, Pennsylvania, Florida, and California, standing in for a proposed nationwide class; each defendant is among the country’s largest reverse-mortgage servicers.
The named plaintiffs say they were each charged thousands of dollars. In one example cited in the complaint, a borrower was billed more than $14,000, and another was charged roughly $17,000 in foreclosure attorneys’ fees even though the federal program caps such fees in New York at $725. The plaintiffs contend that the improper charges did not simply add a one-time cost. Because interest and mortgage insurance premiums on a reverse mortgage accrue against the outstanding balance, the complaint alleges the servicers then calculated those ongoing charges on balances that the disputed fees had inflated, compounding the loss of equity over time. The plaintiffs estimate that potentially tens of thousands of HECM borrowers across the country were charged similar prohibited fees dating back to 2012. They are asking the court to order reimbursement or a credit reversal of the disputed charges for the whole class.
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What the HECM rules allow servicers to charge
A Home Equity Conversion Mortgage is a reverse mortgage insured by the Federal Housing Administration that lets homeowners aged 62 and older convert part of their home equity into cash without selling or making monthly payments. Because the program is federally insured, the fees a servicer may collect are tightly defined. The federal regulations that govern the program, set out in Title 24, Part 206 of the Code of Federal Regulations, limit the routine monthly servicing charge on most HECM loans to no more than thirty dollars. Charges tied to a foreclosure, property inspections and similar servicing actions are likewise constrained by HUD’s rules and the terms of the loan agreement.
The complaint identifies four specific categories of charges it says are prohibited: attorneys’ fees, property inspection fees, property preservation fees, and appraisal fees. Those are servicing actions tied to foreclosure, and the suit alleges the defendants loaded them onto borrowers’ balances in amounts and situations that federal rules and the loan contract do not permit.
The core of the plaintiffs’ argument is that the disputed charges fell outside those boundaries. Reverse-mortgage balances grow rather than shrink over the life of the loan, because no payments are made and interest is added to what is owed. That structure means any fee loaded onto the balance keeps accruing interest for as long as the borrower stays in the home, which the complaint says magnified the effect of the charges the servicers are accused of imposing.
The foreclosure protections at the center of the case
The complaint ties the fees to a broader failure to follow the safeguards that come with a federally insured loan. The disputed charges are added when a servicer moves to foreclose, the stage where borrowers should be most protected. Before treating a HECM borrower as in default, a servicer must generally send clear advance notice and time to fix a problem that could trigger foreclosure, such as overdue property taxes or lapsed insurance. The plaintiffs argue that piling on prohibited fees while skipping those steps pushes borrowers toward losing homes they could otherwise have kept. State rules can add another layer: New York requires a servicer to notify the state Office for the Aging that a borrower is at risk before a foreclosure can be filed. Charging the fees while skipping these requirements, the complaint contends, violates state consumer-protection laws on top of federal rules.
Why the stakes are highest for retirees
Reverse mortgages are marketed almost exclusively to older homeowners, and the equity in a paid-off or nearly paid-off house is often the largest asset a retiree holds. Fees that reduce that equity can shrink an inheritance, limit the cash available if the home is later sold to pay for care, and in the worst cases contribute to a shortfall that puts the home at risk. The federal consumer agency notes that a reverse mortgage generally becomes due and payable when the last borrower dies, sells the home or moves out for more than a year, at which point the full accumulated balance, including any fees and the interest on them, must be repaid.
For borrowers or their families who want to check their own loans, the monthly and annual statements a servicer provides itemize the charges added to the balance. Homeowners who believe they were billed for something the loan contract does not permit can raise the issue with their servicer in writing and can file a complaint with HUD or the Consumer Financial Protection Bureau. The class action itself remains at an early stage, and whether the servicers charged anything unlawful is a question the court has yet to decide.
This article was researched and drafted with AI assistance and reviewed against the linked primary sources.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
