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Mortgage Scams
5 Tips to Avoid Getting Slammed by a Reverse Mortgage Scam
These days, with Baby Boomers approaching retirement and most of their parents still living, too, an 
unprecedented population of elders has given rise to new financial tools. Brad Stroh, co-founder and co-CEO of Bills.com, offers tips to help people understand reverse mortgages – and avoid falling victim to scams.
"Reverse mortgages can be good tools to help retiring Americans' financial stability," Stroh says. "But, as with any financial service, potential borrowers need to be careful with whom they do business and beware of scammers looking to take advantage of unsuspecting victims. Most commonly, scammers promoting reverse mortgages try to take a fee for providing 'help' that is available for free. Some unsavory lenders offer loans to people who will not benefit from the reverse mortgage, simply to take their cut."
By becoming educated consumers, people can avoid these traps, Stroh says. The first step is to understand the key components of reverse mortgages:
- Reverse mortgages are available to borrowers age 62 or older.
- To qualify, homeowners must have a significant amount of equity built up in their home. Homeowners with little equity will not gain enough from a reverse mortgage to make it worthwhile.
- Unlike a home equity line of credit, there is no monthly payment on a reverse mortgage. A reverse mortgage pays the homeowner, and is available regardless of current income.