How to Protect Yourself While Pursuing a Reverse Mortgage

How to Protect Yourself While Pursuing a Reverse Mortgage

Computer Savy Seniors

A reverse mortgage is a sound financial product designed to help senior homeowners cash in on the equity in their homes and supplement their income at the same time. Many seniors 62 years of age or older are choosing this completely legal option, but must remain vigilant because of so many reverse mortgage scams. Unfortunately, scammers target the elderly thinking they can easily take advantage of their vulnerability. Knowledge is the best defense to help avoid reverse mortgage scams.

Everyone considering reverse mortgages should educate themselves by searching out the latest information and studying it in order to protect against unscrupulous people in the financial industry. Reverse mortgage scams constitute a high percentage of fraud cases involving seniors. Many scammers pose as consultants who advise them on reverse mortgages and assure them that they can help get the best deal for a fee. Once the fee is paid, the consultants flee with the money. There is never a fee for information that is free. This alone should send up reverse mortgage red flags to the informed borrower.

Reverse Mortgage Counseling is Important

Those who perpetrate reverse mortgage scams are knowledgeable and informed. They know exactly what they are doing. They disguise themselves as financial advisors who seem legitimate. Many use convincing graphs and charts to convince a potential borrower that a reverse mortgage is the answer to their financial problems. Sometimes they have false customer testimonials to back up their claims. If an advisor discourages mandatory counseling, reverse mortgage red flags should immediately go up. Discontinue the interview at this point and report the advisor to a regulatory agency.

A common reverse mortgage scam to watch for is unsolicited advice about how to use the money from the reverse mortgage. Financial advisors do not make recommendations to potential borrowers. When reverse mortgage red flags are raised by a similar situation, do not make any financial decisions and contact another advisor immediately.

Avoid reverse mortgage scams by speaking only with counselors approved by HUD. These counselors do not charge a fee and fill out loan paperwork completely before asking for a signature. Aggressive reverse mortgage scams use this ploy to change the loan amount and take the difference for themselves after obtaining a signature. Blank loan paperwork signals reverse mortgage red flags. Be alert to this possibility.

Understand the fine points involved in obtaining a reverse mortgage in order to avoid being misled by a lender. Informed borrowers protect themselves and recognize signs that signal reverse mortgage red flags. Knowledge is the key to getting the best deal when taking a reverse mortgage. Be aware of potential scams and know how to watch for reverse mortgage red flags.