Reverse Mortgage Litigation
If you watch television, you have undoubtedly seen advertisements pitching reverse mortgages to senior citizens. While these commercials tout the benefits, reverse mortgages are not always a good deal for homeowners in Texas.
Quite the contrary, a reverse mortgage can be risky.
In some cases, brokers even mislead vulnerable seniors about the benefits and risks associated with a reverse mortgage. For homeowners who are having problems with their reverse mortgage, legal options are available.
Rachel E. Khirallah is an experienced Dallas, TX reverse mortgage lawyer. If you or your loved one is a senior citizen who was pressured to take out a reverse mortgage or was the victim of misleading or deceptive marketing tactics, Ms. Khirallah is here to help.
Our law firm is committed to protecting the rights and interests of homeowners in Texas. For a free, no obligation review of your reverse mortgage case, please contact our law office today.
Reverse Mortgages: Understanding the Basics
The primary benefit of a reverse mortgage is that it allows some people — specifically those who are at least 62 years of age — to pull equity of their home. In certain situations, a reverse mortgage may be a sound financial maneuver.
How does a reverse mortgage actually work? It is actually quite similar to a standard mortgage, with some unique characteristics. Specifically, a homeowner will receive their payments — meaning the proceeds of their loan — from the lender in installments that begin immediately.
From there, the homeowner will repay what they owe to the bank when they pass away, sell, or otherwise leave their home.
The benefits are clear enough: a senior citizen gets some immediate access to consistent, nontaxable income. That being said, there are considerable downsides to a reverse mortgage that are not typically highlighted in the media — especially in broker advertising.
What are the Downsides of a Reverse Mortgage
There are a number of different disadvantages associated with obtaining a reverse mortgage. It is crucial that senior citizens, especially those who are in a vulnerable financial position, have access to the full information that they need to make an informed decision regarding a reverse mortgage.
All of the potential risks and disadvantages should be known. Among other things, some of the downsides of a reverse mortgage include:
- Complexity and High Fees: Reverse mortgages are complex loans that come with high transaction fees. No one should obtain a reverse mortgage without understanding the full implications of the agreement, including the costs associated with this type of loan arrangement. Though many people are not aware of it, a reverse mortgage can actually be a very expensive way to tap into the equity of a home. It might not be the best available option to access home equity.
- High Pressure Sales Tactics: Many reverse mortgages are sold by brokers using high-pressure sales tactics. This is alarming. Lenders should never mislead borrowers; nor should they apply unfair pressure to borrowers — particularly to vulnerable senior citizens.
- Future Financial Risk: Reverse mortgages come with considerable future financial risk. Under the terms of a reverse mortgage, the holder must live in the home. Otherwise, the lender can begin to take possession of the property. In some cases, such as when a person is experiencing serious health issues and requires more intensive medical treatment, a mortgage lender may attempt to foreclosure on the property. Despite what some borrowers are led to believe, a reverse mortgage can still end up in a foreclosure. In fact, reverse mortgage foreclosures are far from rare.
- Spousal/Family Eviction: Another problem with reverse mortgages is that they can result in spouses or family members getting evicted from a home. If the reverse mortgage borrower passes away or is forced to move out of the property, the lender will almost certainly move to take immediate possession of the property. If a spouse or other family member still lives in the home, and their name was not on the reverse mortgage, they will likely face eviction.
- Loss of an Asset: Finally, a reverse mortgage will lead to the eventual loss of an asset. At the end of the day, the lender will take possession of the underlying property and sell it. If an individual wants to be able to pass on their home to their children or their family members, a reverse mortgage is simply not an advisable option.
Sadly, too many seniors are pressured into obtaining reverse mortgages without being given an opportunity to understand and assess the risks. There have been a number of different cases in Texas in which lenders and brokers have made material omissions, misrepresentations of key facts, and even outright lies to consumers.
Legal options are available for borrowers who have been unlawfully taken advantage of by a reverse mortgage broker or lender. If you have any questions or concerns about your reverse mortgage, an experienced Texas reverse mortgage attorney can help.
Reverse Mortgage: Legal Options for Seniors Who Have Been Misled
If you or your family member was illegally pressured or misled into obtaining a reverse mortgage, you need to take action to protect your rights.
Under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), brokers who market and sell reverse mortgages to consumers are legally prohibited from using false, deceptive, or abusive sales practices.
Our law firm knows how to hold these brokers and lenders accountable for their misconduct. Rachel E. Khirallah is a top-rated Texas reverse mortgage lawyer. She has the skills and industry knowledge necessary to protect the rights of homeowners who have been unlawfully taken advantage of by brokers and mortgage lenders in the course of obtaining a reverse mortgage.
Get Help From a Dallas Reverse Mortgage Attorney Today
At Khirallah PLLC, we have deep experience representing homeowners who have been misled or unfairly pressure into taking out a reverse mortgage. Rachel E. Khirallah is a committed advocate for homeowners.
To get a free, no obligation review of your reverse mortgage case, please do not hesitate to contact our legal team today. With an office in Dallas, we serve homeowners throughout Texas.