A reverse mortgage is a unique loan created to allow elderly homeowners to convert the value of their home into cash without the need to make monthly payments and keep their homes as their primary residence.
However, due to its complexity and target demographic, scammers who want to steal people's homes sometimes focus on the reverse mortgage industry. These scams often use high-pressure sales techniques or highly publicized discounts that expire quickly.
Reverse Mortgage CA will explain in detail what scams you should be aware of and how to avoid them, helping you get a completely legitimate Reverse Mortgage.
What are the Most Common Scams Used?
To meet the needs of a particular homeowner, extortionists customize their strategy. However, these are some of the most common reverse mortgage fraud schemes:
Capital Theft Fraud
When a dishonest appraiser, attorney, and loan manager team up to inflate the value of a home, they make the homeowner believe that there is more equity in their home than there is. That is known as an equity theft scam. The scammers urge the homeowner to "tap into" all that equity by obtaining a reverse mortgage with a smile.
After the homeowner signs the reverse mortgage paperwork, the appraiser, attorney, and loan officer process the paperwork, taking the funds once the loan closes, leaving the homeowner with nothing.
Scams by Family or Close Friends
This fraud occurs when a family or financial advisor convinces a homeowner to obtain a reverse mortgage. They agree to manage the finances, so the homeowner does not have to. The trusted friend or advisor deposits the funds into their bank account on the day the loan is paid off, leaving the homeowner to manage their finances themselves.
How Can I Avoid Being Scammed in a Reverse Mortgage?
Avoiding being scammed requires being alert to any suspicious situation. Here are some tips that can help you.
Pressure to Close The Deal
Scammers aim to complete the transaction and move on to the next victim. They'll frequently employ high-pressure techniques, such as insisting that you sign the paperwork "as soon as possible" to get the bargain.
If a salesperson or someone else is pressuring you to apply for a reverse mortgage, end the conversation. They are not thinking about what's best for you.
Be Cautious with Callers
If you are looking for a reverse mortgage, be aware of regional lenders and companies that offer these loans. If someone calls you to market a reverse mortgage, especially if you haven't been looking for one, it's probably a scam.
Work with Professional People
Even more than conventional mortgages, reverse mortgages are complicated. Before you sign any documents, have a reputable attorney evaluate them.
By working with Reverse Mortgage CA, you will get qualified, secure and responsive information and the best rates in the industry, so don't hesitate to contact us today. We will protect your assets!