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Latest posts by Amanda Byford (see all)
Reverse mortgages are retirement plans for homeowners with good home equity. Lately, scammers have been targeting aging seniors to various scams.
Where a salesperson persuades you to use your reverse mortgage for estate planning and invest the money into an insurance product by promising a high return.
Which could be fraudulent or come with huge fees payable to the financial advisor.
These returns may offset the mortgage interest rate accruing every month on the reverse mortgage loan balance.
They may suggest using cash from a reverse mortgage to buy a new or fix up and resell the property for a profit. Which if doesn’t work may leave you in a huge debt.
Where during a free consultation and home inspection could point out major repairs and suggestion to use a reverse mortgage to pay for the repairs.
This could be a scam simply to earn a sales commission on the reverse mortgage.
These repairs could be exorbitant and could lead to a lien on the property if you are unable to pay.
Low-income seniors who are unable to make their house payments are lured with promises of stopping foreclosure and may be charged an upfront nonrefundable fee to speed up the approval process which could be a way of pocketing your money from the fraudster
A reverse mortgage loan program that’s not insured by the Federal Housing Administration (FHA) could be another scam.
If you must then a HECM loan protects seniors where a meeting with a certified and trained Housing and Urban Development (HUD) counselor is set and all information is explained.
Family members may take advantage of elderly relatives to access wealth and may convince the homeowner to sign a power of attorney and misuse the reverse mortgage loan funds.
Legal action is taken by the Consumer Financial Protection Bureau (CFPB) against lenders who use deceptive reverse mortgage tactics.
Reference Source: MSN
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