Fannie Mae has launched a marketing blitz to promote reverse mortgages, a product for elderly homeowners that it is counting on for growth into the next century.

The company this spring is blanketing New York's Long Island with solicitations and radio and print ads urging older residents to "Find out how your home can start paying for you."

With the population of first-time homeowners dwindling as baby boomers reach middle age, Fannie Mae is hoping elderly homeowners who have substantial equity but live on a fixed income will turn to reverse mortgages, which allow them to borrow against the equity.

But in marketing its program, Fannie Mae must offset the bad taste left earlier this year when lenders asserted that some financial planners were charging steep, unnecessary fees to counsel seniors about reverse mortgages offered through the Department of Housing and Urban Development.

The Long Island campaign includes mailings to 120,000 residents and invitations for counseling.

Local lenders like Bank of New York, Dime Savings Bank of New York, and Long Island Savings Bank are cited as sources for the products.

Later this year, Fannie Mae will move the program to Orlando and Phoenix, which also have many older residents.

"We want to get the message out that reverse mortgages can provide supplemental income or help pay unexpected bills," said Robert Sahadi, Fannie Mae's vice president for housing impact.

Fannie Mae has a lot at stake in the success of reverse mortgages, and wants more banks to offer them.

The government sponsored enterprise markets its own product and also buys reverse mortgages from the HUD.

This year, Fannie Mae expects overall reverse mortgage volume to top 10,000 loans, up from 6,000 last year.

HUD and Fannie Mae took a strong stance against allegedly abusive tactics by financial planners-seeking injunctions in some cases-and also warned lenders about sanctions for obtaining business through deceitful financial planners.

HUD and Fannie Mae believe their actions have largely been effective in halting the practice of unnecessarily charging seniors for counseling, Mr. Sahadi said.

The American Association for Retired Persons, which had been an early supporter of reverse mortgages, still views the products as potentially beneficial, a spokesman said.

Fannie's method of getting the word out-using various media in concentrated markets-has appeal, the spokesman said. "They're presenting information that consumers can use to decide whether or not this is for them."

The approach is necessary because "this is still a product that a lot of seniors don't understand," Mr. Sahadi said. "It's an uphill battle getting the word out."

Once seniors know about the product, there are still cultural matters to deal with.

The prospective customers are "a Depression era/World War II group," Mr. Sahadi said. "They take great pride in the fact that their mortgage is paid off."

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