Tag: reverse mortgage counseling

BEWARE: Reverse Mortgage Scams

Like all businesses, there are representatives that are doing an honest job offering themselves for service and help. And unfortunately there are others seeking their own personal advantage. This applies even to reverse mortgages, as the elderly are often prey to scams. Do not be naive and assume that because the program is there to help, that all the offers are true to the reason the program exists.

Having a team that consists of a reputable reverse mortgage advisor and a third party counselor, in addition to friends and family, is a big step to ensuring you are doing everything right.  There are some easy red flags to look for.  

Here are five giveaways of a reverse mortgage scam:

They ask for money up front

Once you submit an application to a reverse mortgage lender it is fairly standard for them to ask for a deposit for the appraisal. This is usually about $300.00 dollars, but can vary slightly. If you are asked to give anything else, stop. Very little money is required before the closing of the loan. Seek advice before moving forward and do not let yourself be pressured.

They will offer foreclosure assistance

Credible reverse mortgage lenders will not seek out distressed homeowners to offer foreclosure help.

They will show unethical marketing practices

There is a Consumer Financial Protection Bureau that holds all reverse mortgage lenders accountable. If a lender is using public means such as community centers, churches, television or even door to door marketing to pique your interest- beware!

They employ high pressure sales tactics

If you feel uncomfortable or pressured when meeting with your advisor or lender, stop. If your questions are not being addressed or the lender is pushing you to a quick decision, you are still in the driver’s seat and it is time to stop and reevaluate working with them.

They lack credibility and reputation

If your reverse mortgage advisor is credible, they will have professional associates such as the Better Business Bureau, the FDIC and the National Reverse Mortgage Lenders Association behind them.

Reverse mortgage is an individualized, specialized loan for those 62 and over that allows older homeowners to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. If you are planning ahead let your specialist guide you creatively to suit your needs and desires.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.


What is Required Reverse Mortgage Counseling?

reverse mortgage advisor connecticutPrior to being approved for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires each borrow to participate in a counseling session with an approved agency. These not-for-profit agencies are funded by the federal government and work closely with both the FHA and lenders to ensure a smooth process.

The goal of this session is not to steer a potential borrower in one direction or another, but to make sure they clearly understand all aspects of a reverse mortgage.

Here is what you can expect at your counseling session:

The potential borrower will need to schedule an appointment directly with a counseling agency. The lender does not initiate or take part in the session, but can provide you with resources to seek out a counselor. The session will take place in person or over the phone – although the FHA recommends a face-to-face meeting whenever possible.

Prior to your appointment, the counseling agency will provide you with a packet of information to allow you to prepare for the session. During the session the counselor will discuss your immediate and long-term financial needs, your reasons for seeking out a reverse mortgage, address any questions or concerns you may have, and clearly educate you on the process as well as the pros and cons of a reverse mortgage. Again, they are not there to “sell” you on the product, but to educate instead.

Once you have completed the counseling session, you will be provided with a “Certificate of Completion”. This certificate verifies to your lender that you have completed the counseling session and that you understand the essentials of a reverse mortgage. Your counselor will also follow up with you to ensure you have no further needs, questions, or concerns.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.