Article Title - part 1

by Charles Kirkendall

Reverse mortgages are gaining in popularity as more senior's start looking for ways to supplement their retirement incomes. And as the interest in reverse mortgages increase, so are the cases of reverse mortgage fraud and scams. Many seniors are finding that they have lost thousands dollars of their hard earned equity to these reverse mortgages scams. Since reverse mortgages typically involve our largest asset (your home), this type of fraud can have a serious negative impact on your retirement. The following reverse mortgage fraud information will help you avoid becoming a victim of a reverse mortgage scam.
Reverse Mortgage Scams

The are several types of reverse mortgage scams that can end up costing you thousands and even tens of thousands of dollars in equity in your home if you become a victim.

Charging for free information on reverse mortgages

Several estate planning companies have been charging thousands of dollars for information provided free from HUD. Typically these companies charge for this information as part of an estate planning program. Seniors that sign up for these programs are unaware that these firms are collecting thousands of dollars by charging a fee of 6 to 10 percent of the total amount borrowed. These fees costs the victims $6,000 to $10,000 on a $100,000 reverse mortgage. HUD has recently issued a directive to lenders that issued reverse mortgages insured by the Federal Housing Administration (FHA) to stop doing business with these companies.

Pushing reverse mortgages as a way to pay for purchases

Some companies that sell large ticket items or services, like annuities or insurance products, may try to suggest using a reverse mortgage as a way fund these purchases. When the additional cost of the reverse mortgage is factored into the purchase, it ends up costing the homeowner much more than the benefit provided by the product or service.

Unethical reverse mortgage terms

Some lenders slip in excessive fees and terms into their contracts. These terms can have a serious effect a Seniors equity. In some cases, lenders have used shared equity or shared appreciation terms, which gives the lender the right to collect a portion of the appreciation when the home is sold or refinanced. The cost of these type provisions can run into the tens of thousands as the home appreciates. These rising cost provisions eat up equity without providing any additional benefit to the homeowner.

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Related Avoiding Reverse Mortgage Scams Articles: Change In Texas Law May Make Reverse Mortgages More Popular Texas has always been reluctant to allow its citizens to borrow against their homes equity. A change in the law that makes it easier to take out a reverse mortgage may happen soon. The Reverse Mortgage... What The Heck Is It Anyway? If reverse means to go backwards, then what the heck is a reverse mortgage? Here's a simple explanation to clear away the confusion. Consider Different Reverse Mortgage Options There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages. Refinancing A Reverse Mortgage The reverse mortgage is primarily a resource for our senior population, and it has become a widely used financial instrument. The Advantages Of Reverse Mortgages High property values and low investment returns have senior looking to use their equity to help fund their retirement. A reverse mortgage can help them.

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