Reverse Mortgage Fraud on Rise

Monday, September 29, 2008

One area of concern in Indiana and nationwide is reverse mortgage fraud. A reverse mortgage is a loan allowing people who have a great deal of equity in their home to convert that equity into funds. These funds can be paid to the homeowner in a lump-sum payment, a monthly income payment or an available line of credit. Make sure you understand the pros and also the reverse mortgage cons.

Reverse mortgages are only for people who are at least 62 years old. And in order to be eligible for a reverse mortgage, they need to have equity in the property they use as a primary residence. Because of these requirements, reverse mortgage scams are often geared toward senior homeowners who have growing medical and credit card debt, and who probably have a small pension or are living solely on Social Security. Adding to the danger is a very detailed application process, which results in scammers having access to extensive details regarding one's personal financial history and assets.

Although reverse mortgages are a legitimate lending option for homeowners that meet a very specific set of criteria, more and more unscrupulous mortgage brokers are using the little-understood finance option to defraud their trusting customers. Luckily there is HUD counseling that helps protects seniors as well.

Fortunately, housing legislation (H.R. 3221) passed by Congress and signed into law by President Bush this summer included several provisions that take aim squarely at the reverse mortgage sector. The new legislation protects consumers by prohibiting brokers from requiring their customers to buy annuities or other financial products when pursuing a reverse mortgage. It also requires mortgage brokers to follow counseling protocols and practices that promote independence and quality counseling.

Use only trusted Reverse Mortgage Lenders and Specialists...

Call today 1-888-973-8377 or visit:

Reverse Mortgage
Reverse Mortgage Lender
Reverse Mortgage Information
Reverse Mortgage Cons

State information:
Alabama Reverse Mortgage
Iowa Reverse Mortgage