Avoiding Inverted Mortgage Scams

Reverse mortgages are gaining in popularity as much more senior's start looking for methods to supplement their retirement incomes

. And as the interest in reverse mortgages increase, so are the cases of reverse mortgage fraud and scams. Many seniors are finding that they have lost hundreds dollars of their hard earned equity to these inverted mortgages scams. Since reverse mortgages typically involve our largest asset (your house), this kind of fraud can possess a serious negative impact on your retirement. The following inverted home loan fraud info will help you avoid becoming a victim of a reverse home loan scam.

Inverted Home loan Scams

The are several types of reverse mortgage scams that may end up costing you hundreds and even tens of thousands of bucks in equity in your house in case you become a victim.

Charging for free of charge info on reverse mortgages

A number of estate planning companies have been charging hundreds of bucks for info provided free from HUD. Typically these companies charge for this information as part of an estate planning program.

Pushing inverted mortgages like a method to pay for purchases

Some companies that sell large ticket items or services, like annuities or insurance items, might try to suggest utilizing a inverted mortgage as a way to fund these purchases. When the additional cost of the inverted home loan is factored into the purchase, it ends up costing the homeowner much more than the benefit supplied by the item or service.

Unethical inverted mortgage terms

Some lenders slip in excessive fees and terms into their contracts. These conditions can have a serious effect a Seniors' equity. In some instances, lenders have used shared equity or shared appreciation terms, which gives the lender the right to collect a portion of the appreciation when the house is sold or refinanced.

Protecting your self from invert mortgage scams

If you are looking into reverse mortgages, there are a number of things which you can do to protect yourself from falling victim to these types of scams.

1. Speak with a HUD approved reverse mortgage counselor. The counselor will help you understand reverse mortgages and assist you to evaluate your situation.

2. Obtain several offers from different reverse home loan lenders so that you can compare various choices. The rule of thumb would be to get at least 3 separate provides to ensure that you have a good comparison from the terms offered.

3. Make certain you understand all the terms and conditions within the reverse home loan contracts. Your reverse mortgage counselor can guide you through the contracts.

4. You usually have three business days after signing the loan document to cancel it for any reason.

If you suspect that a company is operating in violation of the law, let your reverse home loan counselor know and then file a complaint with your State Attorney General's office or banking regulatory agency and also the Federal Trade Commission (FTC) at www.ftc.gov.

by: Aikednea Johansen.

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