January 2, 2009
HUD Counseling for Reverse Mortgages Wards off Scammers
Equity in a home is, of course, one of the benefits of owning in the first place. After all, who wants to go through the loan process, make payments and pay for all the repairs involved in owning without some monetary payoff.
With no other savings, the equity can be tapped into as a lever to solve financial issues. The reverse mortgage was originally invented with this in mind.
The reverse mortgage is not the perfect financial answer for every financial problem for the borrower.
As a possible conflict of interest, it is marketed by people just like me, who make money only when they get a senior borrower a reverse mortgage; they don’t make money by talking the senior out of it.
I am a lender, and I have a high opinion of most in my field. Nearly all loan officers will give a just evaluation, and handle opinions in a measured honest manner.
However, a certain contingent exists in the mortgage industry, as it does in any industry, comprised of unethical individuals willing to lie, cheat and steal to do a deal.
I formerly worked in the copier business, and my company (which shall remain nameless) had a saying for the sales people: Whatever it takes. They really meant it too. Do whatever you have to do to make a sale.
A few people in the business of reverse mortgages feel selfishly too, but have faith. You may not see the bad guys coming, but you will have a backup consultant to spot them for you.
Prior to advancing on in a reverse mortgage transaction the law requires potential borrowers to counsel with a intermediary, HUD approved advisor.
This gives would-be borrowers neutral educated reverse mortgage advice, who may be talked into a reverse mortgage, when they could better solve their monetary crisis in some better way. The counselor should be able to filter through any questionable items and give suggestions.
There always seems to be some scam or bilking of seniors going on. This is one way to reduce the casualties in the reverse mortgage business.
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