What is the reverse mortgage fraud like?Answer:
Reverse mortgage fraud consists mainly in charging large fees to assist in the reverse mortgage process. HUD's reverse mortgage program is designed for senior homeowners and has recently become more and more popular. As a result, reverse mortgage fraud has also become more common.
There are companies charging between $5000 and $10,000 for information on reverse mortgages otherwise provided by HUD-approved counseling agencies free of charge or for a minimal fee. Often, all that scammers do is supply reverse mortgage borrowers with the phone number, or walk them to the office of a HUD approved counseling agency.
In response to calls from victimized seniors, HUD have been trying to forbid FHA lenders to do deal with middlemen companies charging exorbitant fees. In many cases, not only the intermediary company collects huge fees from seniors, but require that they obtain their reverse mortgages in a lump sum, so that the reverse mortgage scam artists can collect their "commission" at once.
To avoid a reverse mortgage fraud, simply locate a HUD-approved agency to advise you for free on the reverse mortgage process.
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