Reverse Mortgage Scam Involves “Free” Homes for Seniors

Have you been approached by someone who claims you can live in a home for free? As reverse home mortgages have gained in popularity, scam artists have targeted senior citizens in an effort to steal equity from properties. In some cases the individuals involved actually work in the real estate or lending industries. Here’s what to remember.

1. Be skeptical of big-ticket freebies. Why would someone you never met before give you a home for free? It just doesn’t make sense. Anytime a real estate investor or some other business person claims you can live in a house for free it’s probably related to a scam to steal the home’s equity.
2. Only individuals who have their names on the title to a house can actually apply for a reverse mortgage. Don’t believe anyone who tells you otherwise. Also, if you aren’t at least 62, you are not eligible to apply for a reverse loan.
3. Do not get involved with schemes where you are asked to lie about living in a home that you do not occupy. Never falsify information when applying for any kind of mortgage.
4. Homes that have been flipped could be targets for equity stripping scams. You may be asked to purchase a home that has an inflated purchase price so that the scam artist can apply for a reverse loan and cash out equity.
5. You must talk with a reverse mortgage counselor before applying for most reverse mortgages. Find a counselor approved by the Department of Housing and Urban Development (HUD) to make sure you are discussing reverse mortgage guidelines with a reputable source.

Be careful who you do business with and avoid reverse mortgage firms that haven’t been in business long. Compare several reverse mortgage quotes to find the right loan package.

This entry was posted on Thursday, April 8th, 2010 at 6:13 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.