Reverse Mortgage Scam

A reverse mortgage is a good idea in theory but in practice there are many reverse mortgage scams. Real estate reverse mortgage scam to the elderly comes in various forms. If you come across a reverse mortgage fraud or scam, report to the authority immediately to stop others from falling for these reverse mortgage scams. Below are some common types of real estate reverse mortgage scam.

Reverse mortgage calculator scam

There are many online mortgage calculators to help you calculate the value of your reverse mortgage. Many seniors not knowing that there are reverse mortgage calculator scams at play, like the inflated value of their reverse mortgage and then go with that lender. In actuality, the lender uses inflated mortgage rate to make the value of the reverse mortgage more attractive. With inflated mortgage rate, the cash out value is highly inflated for the reverse mortgage which is inaccurate.

Unlicensed reverse mortgage lender scams

Some lenders claiming to be able to do reverse mortgages are not licensed and not approved by the Department of Housing and Urban Development. Some reverse mortgage lenders claim to have HUD approval for their reverse mortgage practice. However, many of these lenders are scamming and committing fraud because in actual fact they do not. You can check with HUD to see which lenders are actually legitimate.

Should I shop for rates and fees for reverse mortgage?

There is no need to. HUD has mandates concerning the rates for reverse mortgages and fees. Lenders that attempt to overcharge are committing fraud, illegal activity and scamming.

Reverse mortgage share appreciation scam

The federally insured Home Equity Conversion Mortgage or HECM does not have equity sharing or shared appreciation feature. Therefore, any lenders or anyone offering a share appreciation option should be reported.

How to avoid reverse mortgage scam?

To avoid a reverse mortgage scam, you need to choose a good and legitimate reverse mortgage lender that is approved by HUD. It is important to check with HUD when trying to obtain a reverse mortgage. The Reverse Mortgage Times monitors reverse mortgage scams, you can check with them to read up on reverse mortgage scams.