Reverese Mortgage Scam
Reverse Mortgage scams affect anyone with a home mortgage they are having troubles paying for, but most commonly senior citizens. Previously, these types of scams were done offline, but now with the multitude of resources, the Internet has paved the way for a number of new scams, including the reverse mortgage scam. A reverse mortgage, also called a home equity conversion mortgage, have increased substantially since 1999, therefore the number of scammers attempting this type of fraud on unsuspecting people, has risen as well.
In order to convince the person they should participate in this reverse mortgage product, they will try to sweeten the deal by offering a free home, foreclosure assistance, and refinance assistance or investment opportunities. They target senior citizens mainly, as they find they more unsuspecting, especially in relation to the Internet. The benefit for the scammer in this type of fraud is that they will steal the equity of the home from the victim, and the victim will not realize this until it is too late.
Individuals targeted for the reverse mortgage scams are from randomly generated emails, investment seminars, local businesses and churches, television and radio commercials, billboard notices, and advertisements sent in the mail. Because many of these involve the individual seeking out the scammer, it makes them feel more in control, thus easier to trick them into the reverse mortgage scheme.
There are a number of ways to recognize a reverse mortgage scam and prevent yourself or someone you know from becoming the next victim. First of all, never respond to advertisements which are unsolicited. This is a big red flag, especially in any area of loans or investments. If you are offered a home with little or no down payment, that is also extremely suspicious. Never sign a legal document unless you understand it completely, and if you are not sure, hire a lawyer to review the documents before you sign them. Avoid taking payment from an individual for a home you did not personally purchase, and look for your own reverse mortgage counselor who is legitimate and reputable, such as from a recommendation or who is associated with a reputable financial institution.
If you have been victimized by reverse mortgage fraud, you can file a complaint with HUD as well as your local FBI office.