Reverse Mortgage Guide

Speaking in Washington, Senator Herb Kohl (D-WI), Chairman of the Senate’s Special Committee on Aging said that “because foreclosure filings are public information, scammers target the already troubled homeowners, contacting them by phone or mail repeatedly with claims that they can help the homeowner stay in their home. These financial predators say that they can help “save” the home of a person or family experiencing foreclosure. They create a sense of urgency and say that there are no other options. They tell the homeowner not to contact their lender or seek legal advice. In the end, these predators walk away with both the title and equity of the home.

“Senior homeowners,” he continued, ”are particularly vulnerable to rescue scams because many of them are on fixed incomes and rely on the equity in their homes as their primary financial asset. They are also particularly attractive to financial predators because they tend to have a larger amount of equity in their homes. Older homeowners are also more likely to experience foreclosure in the first place because, according to a study conducted by AARP, seniors are three times more likely to have sub-prime mortgage loans than younger borrowers. The foreclosure rate for sub-prime loans is much higher than prime loans because they carry a much higher risk of default by the borrower.”

In the required ethics class I teach for Maryland real estate brokers, we had one broker who described a mortgage-rescue scam where the two owners of a property were duped out of equity worth hundreds of thousands of dollars. The gentleman was 79. His mother was 103.

Be careful out there. Before refinancing a home, speak with an attorney who specializes in elder law.

For the full statement by Sen. Kohl, press here

This entry was posted on Wednesday, February 20th, 2008 at 3:42 am 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.