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Avoid reverse mortgage shopping scams

Cora Fume - Consumer Protection Federal Bureau
 
Avoid reverse mortgage shopping scams

The COVID-19 pandemic has affected many Americans’ financial and retirement plans. If you’re a homeowner over age 62, you may be thinking about a reverse mortgage. A reverse mortgage is a loan that allows older homeowners to use the equity in their homes. Unlike a traditional mortgage, there is no monthly mortgage payment, and the loan is usually repaid when the borrower sells or no longer lives in the home.

As a result of the economic uncertainty caused by the COVID-19 pandemic, scammers may be targeting older homeowners through reverse mortgage schemes. These schemes can include:

  • A trusted family member or caregiver coercing an elderly homeowner into applying for a reverse mortgage loan or impersonating their elderly relative during the loan process.
  • Using an older homeowner’s identity, Social Security number, or other personal information without his or her knowledge to get the loan money.
  • Tempting reverse mortgage borrowers to use loan money to make a “can’t miss” investment or to take out a reverse mortgage to pay for high-cost repairs or improvements to the home.
  • Trying to convince the reverse mortgage borrower to sign a power of attorney that gives the scammer sole access to the reverse mortgage loan money.

Unfortunately, many older homeowners do not realize they have been scammed until the loan money is gone. Scammers often target older adults through community organizations; investment seminars; and television, radio, billboard, and mailer advertisements.

These tips can help you avoid a reverse mortgage scam or problem:

  • Don’t get a reverse mortgage just because a contractor says that’s the best way to pay for expensive repairs or home improvements.
  • Reverse mortgage loan officers are not allowed to sell you investments or other financial instruments. Don’t plan to buy an annuity or make other investments with the money from a reverse mortgage.
  • Talk to a few lenders before you decide to take out a reverse mortgage. If a lender says they are the only person you should talk to, that’s a warning sign, and it could be a scam.

To learn if a reverse mortgage loan is right for you, talk with a reverse mortgage counselor. To find a HUD reverse mortgage counselor in your area, search HUD online  or use its interactive voice system at 800-569-4287.

To learn more about what is a reverse mortgage and how one works, go to www.consumerfinance.gov/reversemortgage.

 

Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 09/27/2022. The listing information on this page last changed on 09/27/2022. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of Bright MLS (last updated Tue 09/27/2022 12:30:44 PM EST) or CJARMLS (last updated Fri 05/20/2022 2:39:11 PM EST). Real estate listings held by brokerage firms other than Berkshire Hathaway HomeServices Homesale Realty may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved. --

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