One of the disadvantages of owning a home is that you can’t easily tap the equity built up in it. Selling is always an option, but people need a place to stay, and many elderly are hesitant to move. Wouldn’t it be great to tap into the equity of your home while living in it?
One method is a reverse mortgage. It is a loan homeowners aged 62 or older can take out, allowing them to convert some or all of their equity into cash. They can then use the money for anything they want, including living expenses and health care.
If you take out a reverse mortgage, you don’t pay it back until you sell your house. Nevertheless, this area is ripe for fraud and abuse, leading many seniors to take out a reverse mortgage when they normally wouldn’t or agreeing to terms that are excessive or onerous.
Types of Reverse Mortgage Fraud
As experienced Dallas real estate dispute lawyers, Rachel has seen many seniors fall prey to dishonest tactics, such as:
- Aggressive sales pitches. Many mortgage brokers call up seniors at all hours of the day to try and convince them to take out a reverse mortgage. Some brokers might claim there is an artificial deadline, which is clearly designed to pressure seniors into signing on the dotted line without giving the process much thought.
- Deceptive advertising. Some advertisers wrongly claim that a senior who takes out a reverse mortgage is never at risk of losing their home—which simply is not true. Other advertising can hide the true costs of these mortgages.
- Misrepresentations. Many lenders make false claims about their products or about reverse mortgages generally to induce seniors to sign up for them.
If you experience any of the above, you should immediately stop the reverse mortgage process.
How to Protect Yourself from Reverse Mortgage Fraud
The Federal Bureau of Investigations recommends the following tips to protect yourself and a loved one from reverse mortgage frauds:
- Do not sign any contract that you have not read and fully understand. Ask for help if you are confused. Legal language is often confusing, and an attorney can explain it to you in plain language.
- Find our own reverse mortgage counselor and meet with them if you have questions. Contact the Department of Housing and Urban Development (HUD) to find approved counselors.
- Never respond to any unsolicited offer or advertisement. Throw them in the trash.
- Don’t give out sensitive personal information over the telephone. Doing so makes you vulnerable to identity theft.
If you do fall victim to fraud, you can lodge a complaint with the FBI or with HUD. You should also meet with an experienced attorney who can discuss your options, which might include suing the lender for deceptive practices or fraud.
Reach out to Us Today
Reverse mortgage fraud deprives seniors of their property and causes millions of dollars in losses. If you or a loved one suspects fraud, contact Khirallah PLLC today. We are an established Dallas real estate litigation firm, and we can help you receive compensation to make up for any losses caused by the reverse mortgage fraud.