Mortgage Scams........

Reverse mortgages scams are on the rise. Reverse mortgages are becoming more popular with seniors who are looking to supplement their retirement income. With the popularity gaining, more and more people are trying to cash in on the lack of knowledge of seniors and rob them of their money. There are many cases of reverse mortgage scams or frauds. These scams can have a devastating effect on a person's retirement since a house is typically your largest asset. These scams can cost you thousands of dollars in home equity. The biggest way to fight against this rise in reverse mortgage scams is to educate yourself about reverse mortgages.

You don't have to pay for information.

You can get all the information you need about reverse mortgages free from HUD. Some companies are charging thousands of dollars for this information. Typically these companies add on the charge for this information as part of an estate planning program.

Don't use a reverse mortgage to pay for other products.

If a company is trying to sell you a product and suggests that you use a reverse mortgage to finance it - RUN! Many companies selling annuities or other insurance products do this. These companies are getting paid on the reverse mortgage and the insurance products. The reverse mortgage scam is not that it's a bad idea, it's just used in the wrong way. When you add up the fees associated with both products, you are paying way too much.

Beware of high fees.

Some lenders will prey on seniors' lack of knowledge and include high fees and unnecessary terms in the contract. There are some terms included that could cost thousands of dollars in equity with no benefit for the additional cost.

How can you protect yourself from reverse mortgage scams?

1. Take advantage of HUD counseling. Almost all reverse mortgage contracts will require counseling. Beware if you are told you don't need it. HUD counselors will help you determine whether a reverse mortgage is a good option for you.

2. Shop around. Get several offers from different reverse mortgage lenders and compare for your best deal.

3. Make sure you understand your reverse mortgage contract thoroughly. You cannot afford to make a mistake - it could cost you your retirement. Your reverse mortgage counselor is there to help you.