Reverse Mortgage Scams: How to Protect Yourself

How to Protect Yourself from a Reverse Mortgage Scam.

Here are three tips that you can use to protect yourself from a reverse mortgage scam. Don’t forget to check the first in the Reverse Mortgage Scam series to learn how to tell if someone is attempting to deceive you.

A reverse mortgage can be a great for many customers, however, there are people (like in any industry) who are out there to do damage. Knowing how you can protect yourself can make your reverse mortgage experience a great one.

If you have more questions regarding reverse mortgages, leave a comment below or message us at anytime.

1. Do Your Research! – A good way to protect yourself in most situations is to always do your research. Make sure you understand the obligations and requirements, as a borrower, and the reverse mortgage process in general. Take the time to research the lenders that you are choosing to work with. Read blogs or articles, watch videos, and talk with people that have received a reverse mortgage.  A lender may tell you that you will never lose your home, however, if you do not understand the obligations of your loan, you may be in danger of losing  your home. Steer clear of lenders that will charge you an application fee or any upfront fees. Scammers tend to misrepresent the obligations of the loan or will hide documentation that shows their fees or rates. Remember, being informed is the best way to protect yourself.

2. Ask your  Reverse Mortgage Counselor lots of questions – A reverse mortgage counselor is an unbiased third-party individual whose sole purpose is to explain the reverse mortgage program to you. Their job is to review the reverse mortgage process and answer any questions you might have, so that you are able to decide if you want to move forward. During the counseling session, make sure to ask lots of questions to be sure you fully understand the process, requirements and your obligations as a borrower. Be advised, if your lender attempts to appoint your counselor for you, that this may be a sign that they are attempting to scam you. This is an illegal move and you have the right to pick your counselor for yourself.

3. Know that you have time to change your mind. – To protect the borrowers,  a  right of rescission  is put into place in case you change your mind or feel uneasy about the process. After signing the loan documents, you have 3 days to rescind your loan. If you feel that this is right and you still want to do it, you can continue to proceed. A company that would be guilty of manipulating you would  not give you access to a right of recission.