Wednesday, July 15, 2009

Tip of the Week: Reverse Mortgage Scams

I meant to publish this week's Tip of the Week on Monday. Unfortunately, I was dealing with an extremely slow internet connection that made it unfeasible. (It was only 1.3 kbps for the geeks who read this. Yes, my DSL connection was actually slower than dial-up.)

Anyway, with all of the problems in the housing market these days, more and more senior citizens are turning to reverse mortgages. In fact, reverse mortgages, also known as Home Equity Conversion Mortgages, have increased more than 1,300% between 1999 and 2008.

This growth, unfortunately, creates significant opportunities for fraud perpetrators.

The Federal Bureau of Investigation released a few things that senior citizens should know so that they don't become victims. This includes:
  • Do not respond to unsolicited advertisements;
  • Be suspicious of anyone claiming that you can own a home with no down payment;
  • Do not sign anything that you do not fully understand;
  • Do not accept payment from individuals for a home you did not purchase; and
  • Seek out your own reverse mortgage counselor.
More details are available from the FBI here.

1 comment:

Anonymous said...

Thanks alot for the great post!

Bloomberg reports that Victor Stern, a North Carolina home owner, saw his credit score drop 121 points after he got bank approval for a mortgage modification