Reverse Mortgage Scams

2008-04-05T22:20:00-05:00

As reverse mortgages become more popular, they are beginning to draw the attention of scam artists. Here are some important tips to keep in mind:

1) Never pay for information or education about reverse mortgages. There are scam artist offering to teach seniors "how to get a reverse mortgage" and charging thousands of dollars! You can receive all of the information you need through any HUD approved lender. You can request educational information free from us.

2) Only work with a HUD Approved lender. You can verify if a lender is approved through HUD website here. If you work with a lender that is not HUD approved, you will either receive a reverse mortgage that does not carry the guarantee and insurance of the federal government, or they will end up referring you to a HUD approved lender and charging a fee as high as $2,000 for acting as your "Adviser". The fee is included in the origination fee and financed in the loan so you may not even notice it, but they are charging this much just for "advising you."

3) Never sign ownership of your property over to anyone. You should not have to sign a deed to the lender, loan officer, title company or anyone else involved in the transaction. There are instances where you may opt to remove or add a family member to your deed, but you should never sign a deed to any other party. Beware of any document presented to y ou at the closing that includes the terms "Convey" or "Deed". There are reverse mortgage scams where an unscrupulous loan officer or lender will tell you it is normal practice to "Deed the home over to them", if this happens you should report them to the Dept of HUD and discontinue any dealings.

4) Never sign over your proceeds check. There have been scams where a loan officer has convinced a borrower to "sign over" the closing check telling them it was "Standard Procedure" in order to receive the tenure payments. The loan officer made a few payments to the borrower (while scamming others) and then disappeared with the money. In a legitimate reverse mortgage transaction involving monthly benefit payments, the money will not be disbursed at the closing, the lender will hold it back in order to provide it monthly according to the terms of the reverse mortgage. Never sign a check made out to you over to anyone else!

To learn more about reverse mortgage loans, request my free report or continue browsing this website.

Florida Reverse Mortgage

Reverse Mortgage Scams