No doubt that scammers love to prey on the older generation. And one of the most popular scams running currently is the reverse mortgage, or “home equity conversion mortgage” (HECM) scam. It has gotten so bad that these scams have the attention of the FBI, and Ilyce Glink of the Equifax Finance Blog has an important article about how you can protect yourself and your loved ones from it, “
HECM scams target older people, and offer everything from free homes to refinancing help. They get the victims signed up for reverse mortgages offered from questionable or shady institutions and then pocket the proceeds. Similar scams use the elderly as pawns to get reverse mortgages on homes they do not legally own, then similarly enjoy the profits while the victims suffer
foreclosure and eviction. Even if the victims can prove they were not complicit in this form of fraud, they still end up suffering rock-bottom credit scores and in
The best way to avoid being scammed is to keep asking questions until you are satisfied you are getting a straight answer, and do not sign anything or give any personal information until you are sure you understand what you are signing. There is a particular point in the HECM process which can reveal scammers more easily, where person seeking the HECM receives formal counseling about the program. If the lender offering the HECM influences the counseling, by selecting the counselor, making the appointment with the counselor for the client or not providing written proof of the counseling, stop the process and get out while you can.
For more information about reverse mortgages, see the real estate section of the
Equifax Personal Finance Blog, and while you’re there, be sure to read the helpful articles on credit, insurance, taxes and retirement, too.