Dangers of Reverse Mortgages
There are dangers prowling in every corner even with mortgages. The reverse mortgage is no exception to that. You should be aware of frauds and scams so that you don’t lose your money. There are many reputable firms; but there are those that are fraudulent. These are usually fake sites that lure people in and charge huge amounts. Senior citizens can become a target because they are vulnerable. Information is free from HUD. These companies ask for 6-10 percent for names of lenders and filling applications. Do not sign a contract under duress from an agent.
A recent report by ASIC who interviewed 29 borrowers found that they did not understand how a reverse mortgage worked. They did know how long it would take to pay off the loan. There was no long term planning. They did not realize that this type of loan was only paid when the client died or moved into a long-term housing. This mortgage leaves borrowers with little money and unable to move into a long-term facility. On top of that, their family’s inheritance significantly dwindles. The lenders were not forthright about risks and talked the borrower into a higher amount.
Remember to get quotes from more than one lender. Look around, gather information from different sources, and compare them. This can help protect you and your estate. There are many frauds by phone, so be careful not to give out information. Keep your eyes open and beware of one of the biggest risks, foreclosure. You could find yourself in real danger and sleeping on the street! This is where buyer beware comes in. Make sure you read the fine print! Many of these documents are just adapted contracts. You could be in default for outstanding debts or uninsured property.
It is important to understand the dangers of reverse mortgages. If you have elderly family or friends make sure they know the facts and are not taken advantage of in a time of weakness. Make sure they look around, source out more than one lender, and compare the information. If not they could be left trying to re-pay an enormous debt. Lenders have to be fair too. They need to re-vamp their contracts to reflect changes. Older individuals need respect and should not have to take things on trust, especially if there is no trust there to begin with.
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| Pros and Cons of Reverse Mortgages What I haven't seen EUR and would henceforth like to offer here EUR is a feature that combines both the pros and cons, such that potential borrowers can clearly see the real calculus that underlies the decision to obtain a reverse mortgage. ... | ||
HUD Study to Assess Consumer Protection Gaps for Reverse Mortgages - Reverse Mortgage Daily
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Two New Reverse Mortgage Counselors in the Triangle - PR.com (press release)
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Evening Standard; London (UK) - House prices 'set to go into reverse again' July 19, 2010 -- HOMEOWNERS face a second fall in house prices as the recovery in the property market slams into reverse. Experts today warned that... | ||
Scotsman (Edinburgh, Scotland), The - Money Morsels: Low interest rates make buying cheaper July 24, 2010 -- Byline: NO BYLINE BUYING a home is cheaper than renting in almost three quarters of the UK's biggest towns and cities, it has been... | ||
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Realty Q&A: What to do with a reverse mortgage if you remarry If a couple takes out a reverse loan, but then one spouse dies and the survivor remarries, it's time to give the lender a call. Even though reverse mortgages are nonrecourse loans, there are reasons to consider refinancing into a new loan... | ||
Lender Calls Out MSNBC for Misleading Reverse Mortgage Reporting I'm sure the majority of RMD readers saw MSNBC's "Consumer Man" terrible article on reverse mortgages. MSNBC's Herb Weisbaum wrote that consumer advocates believe the country is headed toward another mortgage meltdown in the reverse ... | ||
Rules set for reverse-mortgage lenders - Pittsburgh Post Gazette
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