Reverse mortgages, also called Home Equity Conversion Mortgages, are intended to allow homeowners over the age of 62 to get equity from their homes without having to make monthly payments. But scam artists have come up with a series of ploys to drain the equity and take the money.
Scammers use churches, seminars and a variety of forms of advertising to target seniors. AARP offers a lot of helpful information about reverse mortgages.
The FBI said some victims have been used to unwittingly help the criminal steal equity from flipped properties. They are lured with offers of free homes, opportunities to invest and assistance with refinancing.
Real reverse mortgages are insured by the Federal Housing Authority (FHA).
The FBI and the U.S. Department of Housing and Urban Development offer the following advice:
- Do not respond to unsolicited advertisements.
- Be suspicious of anyone claiming that you can own a home with no down payment.
- Do not sign anything that you do not fully understand.
- Do not accept payment from individuals for a home you did not purchase.
- Seek out your own reverse mortgage counselor.