Reverse Mortgage Scams
As homeowners approach retirement, they frequently look for ways to supplement their income – an increasingly popular option is to take out a reverse mortgage.
While there isn't anything wrong with reverse mortgages, scammers and fraudsters are beginning to use the popularity of reverse mortgages to take advantage of seniors.
This article will provide insight into how senior citizens can protect themselves against falling victim to these common malicious practices and keep secure during their retirement!
Identity Theft and Elder Fraud
Identity theft and elder fraud are among the most common reverse mortgage scams. Scammers often pose as legitimate lenders or counsellors and request personal information, such as Social Insurance and bank account numbers. They may use this information to steal your identity or commit various financial fraud.
To protect yourself, only provide personal information to trusted and reputable sources. At Retire Better, we are licensed specialists in reverse mortgages, and every one of our emails offers links to our license details with the government authorities.
To stay protected, ensure you only work with reputable reverse mortgage lenders with an online presence. If you cannot find them online—don't deal with them!
Misleading Marketing and Unauthorized Fees
Another common reverse mortgage scam is misleading marketing and unauthorized fees.
Some lenders or brokers may use deceptive marketing tactics to lure seniors into taking out a reverse mortgage. They may make promises too good to be true or use scare tactics to convince seniors that a reverse mortgage is their only option. To protect yourself, be wary of any marketing materials that seem too good to be accurate and research before making any decisions.
Some lenders may also charge unauthorized fees, such as application or counselling fees. To protect yourself, ensure you understand the reason for any fees and that all fees are correctly listed in writing. Stop dealing with any broker who charges a fee to arrange a reverse mortgage. In Canada, the major reverse mortgage lenders only charge a fixed, one-time setup fee of approximately $2,000.
High-Pressure Sales Tactics and Loan Default
Scammers may also use high-pressure sales tactics to convince seniors to take out a reverse mortgage. They may try to rush you into deciding or use scare tactics to convince you that time is running out.
Homeowners must take all the time they need to make a comfortable decision, and there should never be a reason to rush through the process. At Retire Better, we believe in transparency and open communication and strive to make the process as easy and stress-free as possible for our clients. We provide our clients with personalized advice and guidance throughout the reverse mortgage process to prevent high-pressure sales tactics.
Foreclosure and Equity Theft
Scammers may convince seniors to sign over the deed to their home or take out a reverse mortgage and then disappear with the funds, resulting in foreclosure and equity theft.
To protect yourself, only work with trustworthy lenders and never sign over the deed to your home without independent legal advice! At Retire Better, we work with reliable lenders who would never require you to transfer the deed to your home to them.
How Can People Identify These Reverse Mortgage Scams?
With reverse mortgages becoming increasingly popular, potential scams can put seniors at risk of identity theft and financial hardship. It's essential to be safe from dishonest lenders or brokers that you do your due diligence before making any decisions—from scrutinizing unsolicited offers to researching reputable lenders online. Also, be aware of all associated fees with a reverse mortgage and ensure the lender is forthright about disclosing them upfront.
Making the most informed decision possible is critical for benefiting from all the advantages of reverse mortgages. Listen to your instincts—if something does not feel right, stop and ask questions until you feel comfortable proceeding. If in doubt, get a second opinion from reputable counselling and financial education resources.
How to Protect Yourself from Being Scammed in a Reverse Mortgage Transaction?
To safeguard your finances and home equity in reverse mortgage transactions, here are some proactive steps to consider.
Do your research and educate yourself about the reverse mortgage process. Ensure you fully understand the terms and conditions of the loan and any associated fees.
- Seek Counseling:
Don't take the reverse mortgage process at face value - get expert advice! A HUD-approved counsellor can provide objective information and guidance to help make your decision easier.
- Work with a Reputable Lender:
Only work with a reputable lender who has a proven track record of providing quality service and is transparent about their fees and terms.
- Don't Sign Anything You Don't Understand:
Sign only documents after fully understanding the terms of the agreement. If you have any doubts or questions, seek advice from a trusted financial advisor or attorney.
- Be Wary of High-Pressure Sales Tactics:
Be cautious of anyone who uses high-pressure sales tactics or tries to rush you into making a decision.
- Protect Your Personal Information:
Be cautious of anyone requesting personal information, such as your Social Insurance or bank account number. Only provide personal information to trusted and reputable sources.
Protect your financial future and the equity in your home from scam artists with these simple steps. Make sure you're informed about all aspects of reverse mortgages to make intelligent decisions for yourself.
What To Do If You Think You're Being Scammed?
Immediately take action if you suspect foul play in your possible reverse mortgage transaction.
You should stop communication with the scammer and contact authorities and your lender or counsellor for assistance. Evidence such as emails or phone records go a long way to shut down scams, so gather any pertinent documentation that could be useful before taking further steps toward protecting yourself and others from the same fate.
Protecting Yourself from Reverse Mortgage Scams - What Retire Better Can Do
Retire Better is dedicated to ensuring our clients' financial information remains secure and protected from schemes, scams, and other fraudulent activities. You can trust our extensive network of vetted lenders to complete legitimate reverse mortgage transactions—we even provide personalized counselling sessions! Plus, you can involve your lawyer anytime, and we will work with them to ensure you fully understand the reverse mortgage process.
Reverse mortgages can be a valuable financial tool for seniors, but scammers can also use them to target retired homeowners for fraudulent activities. It's essential to be aware of the potential for scams and take steps to protect yourself from becoming a victim.
At Retire Better, we are committed to protecting our clients from scams and fraudulent activities. We work with a network of trustworthy lenders, ensuring you feel free and relaxed to proceed with any transaction.