October 25, 2012
A huge number of senior citizens who are aged 62 or more are looking in the face of retirement. As a result, lenders all across the board are salivating at the vast prospects it holds to sell reverse mortgages to such a ballooning group of baby boomers. However, the head of the department of elder abuse, San Diego Deputy Attorney, Mr. Paul Greenwood, said that senior citizens should not rush in to take out these loans and conduct thorough research prior to getting them.
This is because reverse mortgage scams are on the rise and hence, it is imperative for people to learn about the ways to identify and avoid them.
Reverse mortgage scams and ways to avoid them
Here are some instances of common reverse mortgage scams and the possible solutions to avoid them:
1. Avoiding the counseling session – Senior citizens should set an appointment with a HUD-registered counselor who is not associated with any lending institution. This session will provide them with all the vital information they need to know before getting a reverse mortgage. However, fake counselors want to avoid these sessions and instead want to get people to sign up the loan agreement straightaway.
2. Asking for fees for basic information – Unscrupulous reverse mortgage counselors and estate planning firms are reportedly asking for service charges for the information they provided which are otherwise free. They do so in the guise of estate planning program fee.
3. Expensive and futile renovation expenses – In case of lenders demanding that a part of the property be renovated, then borrowers should ask for details for the same and understand the reason behind every payment. They must consult multiple contractors in this regard in order to get affordable quotes.
Therefore, baby boomers contemplating to take out reverse mortgage loans should consult with a HUD-licensed counselor and ask them to study their current condition. Moreover, they must get multiple reverse mortgage quotes from different lenders and choose the most suitable one based on their situation.
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