About Us | Contact Us
View Cart

Reverse Mortgage Scams

By Dan Hadaway | Tuesday, July 14, 2009 - Leave a Comment

The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) urge consumers, especially senior citizens, to be vigilant when seeking reverse mortgage products. Reverse mortgages, also known as Home Equity Conversion Mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators.

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related entities to steal the equity from the property of unsuspecting senior citizens aged 62 or older or to use these seniors to unwittingly aid the fraudsters in stealing equity from a flipped property.

In many of the reported scams, victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance; they are also used as straw buyers in property flipping scams.

Seniors are frequently targeted for this fraud through local churches, investment seminars, and television, radio, billboard, and mailer advertisements.

A legitimate HECM loan product is insured by the Federal Housing Authority (FHA). It enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment. Eligible borrowers must be 62 years or older who occupy their property as their primary residence and who own their property or have a small mortgage balance.

Seniors should consider the following:

    • Do not respond to unsolicited advertisements.

 

    • Be suspicious of anyone claiming that you can own a home with no down payment.

 

    • Do not sign anything that you do not fully understand.

 

    • Do not accept payment from individuals for a home you did not purchase.

 

  • Seek out your own reverse mortgage counselor.

If you are a victim of this type of fraud and want to file a complaint, please submit information through the electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG or by calling HUD’s Hotline at 1-800-347-3735.


 

Latest News
    from Dan’s New Role . . . And note the date! Another one of those Dan’s New Leaf Posts, meant to inspire thought about IT Governance . . . . Once again, I am turning over a new leaf.  Those who have not been following this blog for its full fourteen-year history might not realize […]
    Top Seven Risks . . . that small bank Information Security Officers face in 2023! When we present audit reports to boards of directors, we also talk to the board about the top risks the institution is facing. Since 2006, we have been compiling a list of the “top seven risks small institutions are facing,” in […]
    Another awareness poster for YOUR customers (and users). Now that we have our own employees aware, maybe it’s time to start posting content for our customers! Check out posters.infotex.com for the whole collection! Download the large versions here: Awareness Poster (Portrait) Awareness Poster (Landscape) You are welcome to print out and distribute this around your […]
    The new plan calls for technology providers, and not end users, to be responsible for security… An article review.  Following multiple high profile cybersecurity incidents in 2021 and 2022 the Biden Administration recently announced new long-term goals for the nation’s cybersecurity, and under the new plan companies that provide technology would carry more of the […]
    R7: 2023’s Top Seven Technology Risks Webinar-Video What are the top seven risks your board should know about in 2023? Since 2006, Dan has been compiling a list of the “top seven risks small institutions are facing,” in preparation for his board presentations. This webinar will present the 2023 list in a manner that you […]
    A new way of helping people “read” new guidance… Look for more in the future! To save you time, we are proud to present “Adam Reads” . . . recorded versions of our Guidance Summaries! Below you can find an embedded player for the audio file. If you are having issues with that working, you […]
    Times they are a-changin’ . . . The infotex website is being updated. You read that right! We are in the process of updating our website from the circa 2013 version we have had for far too long. As the Digital Media Manager for infotex this excites me greatly and I look forward to the […]
    A new Team member’s first article! In today’s news cycle, it is difficult to miss all the fuss about AI, or more specifically, ChatGPT. So many differing opinions on the matter can make it hard to decipher what the future looks like. Few people think AI is a gimmick, but not many know the possibilities […]
    A draft version of the new framework may be available as early as this summer… An article review. As the cybersecurity landscape is constantly evolving, the tools we use to address risk need to evolve as well–and by this summer we should be getting our first look at planned changes to the NIST cybersecurity framework.  […]
    Another awareness poster for YOUR customers (and users).  Now that we have our own employees aware, maybe it’s time to start posting content for our customers! Check out posters.infotex.com for the whole collection! Download the large versions here: Awareness Poster (Portrait) Awareness Poster (Landscape) You are welcome to print out and distribute this around your […]