Reverse Mortgage Scams: 3 You Need to Watch out For
Do you value where you live? While all scams have the potential to wreak havoc in people’s lives, what is particularly disturbing about reverse mortgage scams is that they strike where it hurts the most – people’s homes and wallets.
As this type of scam can easily blend in with legitimate mortgages and loans, it can be harder to identify. Don’t let a scammer trick you or someone you love. Educate yourself, share our article, and learn how to be scam-free!
Reverse Mortgage Scams You Need to Watch out For
Reverse mortgage scams typically allow older borrowers to take out a line of credit in monthly payments or as a lump sum. Usually, no fees are due until the borrower vacates the home. However, the interest rate increase over time and can leave heirs with a complicated inheritance.
While it is common to receive automated phone calls from telemarketers, calls from scammers can be hard to identify from legitimate callers. When you do answer calls from telemarketers, a percentage of the calls will be from loan companies.
The same is true for reverse mortgage offers sent to you by email or even paper mailing. The problem with reverse mortgages is that they can either be created to trick people into bad (real) loans, while other scams involve total fraud!
Scam #1: Bad Rates & Fees
You think that your new loan is legitimate. You are speaking with a licensed loan officer who seems professional and charming over the phone. They insist that they care about your reverse mortgage and are providing you with the best rates in the business. Maybe you don’t thoroughly read all of the disclosures they send, as they reassure you that the details aren’t anything to worry.
What you might be agreeing to is a rate of interest that puts more money into the loan company’s pocket, while costing your estate more. Another possibility is that someone pitches you extra paid services or insists that you need to finance other home improvement offers, which you don’t!
Scam #2: Phishing Scams
You get plenty of loan and mortgage emails. You open one that suggests a reverse mortgage and download the brochure for the company. Instead of finding out the rates, you’ve now been hacked malware which steals personal and financial information from your computer and home network.
Even if you have a policy of never downloading anything from an unsolicited mailing, perhaps you click on an in-email link to a website. The email may appear official but leads you (through a hyperlink) to a fake site that recreates that of a real lending company. When you enter your private information, that information is now in the hands of a hacker. This can lead to identity theft and financial ruin.
Scam #3: Your Nearest and Dearest
Being scammed by a hacker or stranger is bad enough, but being scammed by someone you trust can cause emotional and financial damage. The Wall Street Journal reports that victims of reverse mortgage scams are typically seniors tricked by someone they know!
This might be a “caring” relative who convinces you to take money out of your home and then makes it. This isn’t chump change – someone might take or talk you out of hundreds of thousands of dollars!
Social Catfish and the FBI want you to be safe. The FBI wants seniors to do the following:
- Don’t trust unsolicited advertisements.
- Watch out for no-down-payment home owning offers.
- Read all disclosures and make sure you understand them.
- Speak with a trusted reverse mortgage calculator.
Are you not sure who just called you? Search a person or company online with Social Catfish. You can also find out where people are finding personal information about you online and remove it!