Is Reverse Mortgage Scam?

The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge clients, in particular senior citizens, to be vigilant when seeking reverse mortgage products. Reverse mortgages, additionally called home equity conversion mortgages (HECM), have expanded more than 1,300% among 1999 and 2008, creating huge possibilities for fraud perpetrators.
Reverse mortgage scams are engineered by using unscrupulous specialists in a mess of real estate, financial services, and related agencies to steal the equity from the property of unsuspecting senior citizens or to apply these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.
In some of the mentioned scams, victim seniors are provided free homes, investment opportunities, and foreclosure or refinance help. They're extensively utilized as straw shoppers in property flipping scams. Seniors are often centered via local churches and investment seminars, in addition to television, radio, billboard, and mailer advertisements.b
A legitimate HECM loan product is insured by the Federal Housing Authority. It permits eligible homeowners to access the equity of their homes with the aid of offering budget without incurring a month-to-month price. Eligible debtors need to be 62 years or older who occupy their home as their main house. See the FBI/HUD intelligence Bulletin for particular information on HECMs as well as other foreclosure rescue and investment schemes.
Tips for Avoiding Reverse Mortgage Scams:
  • Do not respond to unsolicited advertisements.
  • Be suspicious of anyone claiming that you can own a home with no down payment.
  • Do not sign anything that you do not fully understand.
  • Do not accept payment from individuals for a home you did not purchase.
  • Seek out your own reverse mortgage counselor.

If you are a victim of this type of fraud and want to file a complaint, please submit information through the FBI’s electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG at www.hud.gov/complaints/fraud_waste.cfm or by calling HUD’s hotline at 1-800-347-3735.
Location: United States

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