Reverse mortgage scams are fraudulent schemes that target older homeowners who have a reverse mortgage or are interested in obtaining one. Reverse mortgages are loans that allow homeowners to convert a portion of their home equity into cash. These types of loans are typically available to individuals who are 62 years or older and have significant equity in their home.
Reverse mortgage scams can take many different forms, but they generally involve individuals or companies that try to trick or pressure older homeowners into giving them money or signing over the deed to their home. Some common types of reverse mortgage scams include:
- Investment schemes: Scammers might try to convince homeowners to invest their reverse mortgage proceeds in a fake investment opportunity. This can result in the homeowner losing their home equity and investment.
- Equity theft: Scammers might offer to help the homeowner pay off their mortgage or property taxes, and in exchange, the homeowner signs over the deed to their home. The scammer can then sell the home or take out a loan against it.
- Unnecessary services: Scammers may offer to provide unnecessary services such as home repairs or financial advice, charging the homeowner high fees for these services.
- Misrepresenting loan terms: Scammers may misrepresent the terms and conditions of the reverse mortgage loan, leading the homeowner to sign up for a loan that is not in their best interest.
To avoid falling victim to a reverse mortgage scam, it’s important for homeowners to be wary of unsolicited offers or requests for personal or financial information. Homeowners should also do their research and carefully read any documents related to a reverse mortgage before signing. If something seems too good to be true, it probably is. Homeowners should also consult with a trusted financial advisor or attorney before making any decisions related to a reverse mortgage.