Reverse mortgages are aimed at senior citizens who are living on a fixed income source and need a supplement income source. The whole idea behind it is to allow the home owners who are over 62 to use the equity on their property as an extra income source. Reverse mortgages are very expensive and quiet complicated, senior citizens are a target for fraudsters and scammers.
Here are a number of reverse mortgage scams that you should watch out for
People send confusing letters with incorrect information to senior citizens concerning the reverse mortgages. Mostly, they contain overstated virtues on the reverse mortgages. They also do not disclose the risks of all expenses associated with reverse mortgages. When taking out a reverse mortgage, there are considerable fees you will have to make payments on. Reverse mortgages can be quiet expensive and the direct advertisement does not cover this.
Your spouse is not included in the mortgages
In some reverse mortgages plans, only the older spouse is named as the borrower. Most brokers will suggest this to make the mortgage approval process easier. age is a qualifying factor in reverse mortgage and if the spouse passes away, the surviving partner who is not on the mortgage will be required to complete the payment.
The flipping fraud
This real estate property fraud is very common among agents who are dealing with senior citizens. Mostly, they convince the seniors to apply for a reverse mortgage and help them with the whole process. After the mortgage is granted, they encourage you to purchase another property with the proceeds of the reverse mortgage. The property is normally a flipped home which is worth less than what you should pay for.
Vendor or contractor fraud
It’s obvious that senior citizens will find it harder to get a roof over their head, conditioning, heat and coming up with money with the new home. Corrupt lenders, lenders and contractors try to take advantage of them by getting them to apply for a reverse mortgage and using the money to pay for the expenses on their homes. Reverse mortgages are only designed to give the seniors extra income stream. If the money is used for home repairs instead, the income stream will be lowered and there will be a reduction in the income stream.
High pressure sales
Real estate agents and other home sale representatives will offer help to senior citizens on the reverse mortgage application process so they can take advantage of them and confuse them. they will rush them into making decisions that will ruin their financial future.
Fraud y friends and relatives
Believe it or not, some family and friends will try to trick seniors in their circle just to take advantage of them and have some money for themselves. Financial advisors, caregivers, relatives and other people will try inheritance jumping just to get a share of the reverse mortgage money. Relatives and caregivers will try to get the power of attorney from the seniors so they can have an ability to access the money. Unethical financial advisors siphon off the money from the account, which leaves the seniors with financial issues.