If you are over 62 years old and need a loan to get cash, a reverse mortgage is a good option for you. In the mortgage loan, you receive monthly payment from the lender instead of making payment every month. After you die or move out of the house, the lender moves the title of the house from you to himself. You hardly bear any burden over the life of the loan. So isn’t it a wonderful idea to have a reverse mortgage? However, benefits come with danger. Although it is a favorable loan for the old, you need to beware of the reverse mortgage scams.
This scam happens in the case of a borrower planning to buy a house. Vicious realtors look for old people who want to purchase a real property. They may help seniors to get a reverse mortgage. In order to hook them successfully, the reverse mortgages they recommend are always very cheap. If you let the inexpensive loan captivate you, then you will regret in the end. Because gradually you will find that the house you get is a distressed one. It looks nice but is actually poor in condition.
Some frauds make use of loan documents. For instance, a scam artist can cheat money from you with these documents. At first, he sends you a letter on your loan document. Maybe it’s your Reconveyance Deed. Then he will request money to make copies of the deed. What’s even worse, a con artist may deceive you about the cost of information. He charges thousands of dollars to provide you with information about the reverse mortgage. But in fact, it is free. You can get the information yourself from the Department of Housing and Urban Development (HUD).
You must have heard of investment scams on TV or newspapers. The criminal runs away with investors’ capital, and the victim cries for his huge financial loss. In reverse mortgage, the same thing happens. A reverse mortgage is like an investment in annuity. If the scammer runs away. The victim will lose both the money and the house. In this case, the scam artist is often a person who associates with a fraudulent reverse mortgage lender.