The Department of Housing and Urban Development Office of Inspector General and the Federal Bureau of Investigation are encouraging all consumers but especially senior citizens to watch for reverse mortgage scams. Reverse mortgage products are home equity conversions, which are another type of mortgage. They have increased by more than 1,000 percent in the past decade, which resulted in more opportunities for fraudulent products surfacing.
Unethical professionals are the ones behind these reverse mortgage scams. They use financial services, real estate and other related businesses to take victims' home equity. They are known to prey on unsuspecting senior citizens who wind up inadvertently helping them steal the equity on flipped properties. In many scam incidents that are reported, elderly victims are enticed by perpetrators offering free homes, refinance assistance, foreclosure help or investment opportunities. In addition to this, they are used as straw buyers in scams designed for flipping homes. Some common places where seniors are often targeted include churches, television, mail advertisements, investment seminars, radio commercials and billboards. A real HECM product will be identifiable because the Federal Housing Authority insures it. This type of product gives homeowners who are eligible the chance to access their home equity by providing funds without monthly payments incurring. To be eligible, borrowers must be 62 years of age or older, and the property must be their primary residence. Also, it can apply to homeowners who have small mortgage balances. Specifics for this program are outlined in the FBI/HUD Intelligence Bulletin. There is also information about other investment schemes and foreclosure rescues. There are several ways to avoid reverse mortgage scams. All homeowners and especially seniors should be aware of warning signs. Avoid responding to any unsolicited advertisements. This includes business cards left in various places, mailers and fliers. If anyone is claiming it is possible to buy a home with no down payment, be suspicious and aware that this is assuredly a scam. When the terms of any contract are not understandable, avoid signing it. The broker or agent should explain the terms, but unclear answers are a telltale sign of a scam. Never accept money for a home that was not individually purchased. Always ask for the advice of a qualified and experienced professional when seeking a reverse mortgage. Victims of this type of fraud can file complaints by submitting their information through a local FBI office or the electronic tip line. It is also possible to file a complaint with HUD-OIG by calling their hotline. For more information about this topic or for further advice, discuss concerns with us.
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Rod Hanks
Rod has owned The Hanks Group, a Leading Nationwide Insurance agency since 1999. We help families and business owners protect their most valuable assets with a broad range of insurance products. We believe that finding the right auto, home, life and commercial insurance for our clients Starting out with 1 employee in a small office in East Dallas, The Hanks Group has grown to be one of the largest Nationwide Insurance Agencies in the Dallas Fort Worth Metroplex, with offices in Dallas and Fort Worth. Rod is always available to answer any questions about insurance or business at 214-275-8372 Archives
October 2018
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