Get a Second Opinion to Make Sure Your Reverse Mortgage isn’t a Scam

February 06, 2012

Be sure you know what you are signingThe reverse mortgage, a way to turn your home equity into liquid cash, has risen in popularity 1,300 percent between 1999 and 2008.  Along the way this product has unfortunately attracted fraudsters, which is unfortunate because avoiding problems can be as easy as getting a second opinion. If you have been considering a reverse mortgage, be sure to read Ilyce Glink’s article on the Equifax Finance Blog, “

How to Avoid a Reverse Mortgage Scam.”

This kind of government-insured

mortgage turns your owned home into cash if you are age 62 or older by giving out monthly payments. In the scams, seniors who own their homes are often tricked into getting their reverse mortgage from shady banks while the fraudsters take their checks, or seniors are put into very cheaply flipped homes and are signed up for reverse mortgages by the homebuyers. The homebuyers then take the money while the seniors living in the homes are eventually kicked out and their credit scores wrecked.

Seniors can avoid falling prey by knowing all that they can about the program before signing on, especially when it comes to the counseling required to obtain a reverse mortgage. By doing a little fact-checking, this key step can help you avoid the snare of scammers. If the lender leads the victim to a specific counselor or doesn’t require counseling to occur, the victim should get out while they can. Another red flag is a lack of Federal Housing Administration notice on the paperwork, as that agency insures every loan. A second opinion also allows you to compare paperwork and resources between two counselors and lenders, which can point out a fraudster’s glaring defects. For more information about how to avoid these scams, see the FBI’s in-depth bulletin.


Equifax Personal Finance Blog has more information about these, as well as credit, real estate, insurance and taxes that can keep you legal and help you

save money.

Categories: Economy, Education

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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