Mortgage industry groups joined the consumer body Choice yesterday in calling for the imposition of higher standards on lenders and brokers selling reverse mortgages to retirees. The call came in response to the publication of the results of a Choice reverse mortgage shadow shopping survey.Choice sent shadow shoppers to 10 finance brokers and five lenders and found "a poor standard of product information and advice".Among the problems encountered, lenders encouraged shadow shoppers to borrow much larger amounts than they wanted, engaged in very limited discussion of alternative strategies and in some cases directed borrowers to different types of loan products with potentially disastrous consequences.It was not only the selling process that Choice found wanting. It was critical of lenders that put conditions in their loan contracts that would allow them to get out of their no negative equity guarantee obligations for such breaches as failing to renew insurance policies, getting into arrears on rate payments or neglecting to complete compliance documents.Choice senior policy officer for financial services, Nick Coates, said: "Choice is deeply concerned about the findings and will be lobbying all state governments to adopt the new New South Wales mortgage broker legislation. "This legislation ensures all mortgage brokers have a licence, provide access to a dispute resolution scheme and meet minimum standards on advice."Reverse mortgages are very complex and relatively new products with which consumers have little experience. We think these products should be sold only to well-informed people who are aware of the pitfalls and have considered them carefully."The chief executive of the Mortgage & Finance Association of Australia, Phil Naylor, said his association was concerned about the findings. He said the association was making every effort to ensure its members acquired the skill necessary to participate in the reverse mortgage market.The association runs a reverse mortgage education program endorsed by the Senior Australians Equity Release Association of Lenders. It has written a Code of Proper Process that provides brokers with guidelines to ensure they consider the needs of borrowers when discussing a reverse mortgage sale.The MFAA has long been an advocate for uniform national mortgage broker regulation. SEQUAL executive director Kieren Dell said his organisation supported the findings of the survey, including the call for higher standards and regulation. "There must be minimum standards," said Dell.Dell said the survey showed some improvement in the quality of reverse mortgage products. "Last year Choice looked at the market and could not find any products that met their minimum standard for the effectiveness of the no negative equity guarantee. This time around they have approved 10 of 23."We are aware of several lenders working on improvements to their product features now."