A reverse mortgage can be a useful resource for elderly homeowners, but it’s also a sometimes confusing process. In this podcast we provide an overview of the reverse mortgage and how it works.
Welcome to another edition of the CredAbility [now Clearpoint Credit Counseling Solutions] Podcast. Along with your host Mechel Glass, here’s Steve Moore to tackle the confusing topic of reverse mortgages. Steve: The most asked questions we get these days are about scams and, specifically, reversed mortgage scams. Mechel, help us with this. Seniors seem to be targeted more and more in this area. What’s going on? And what should we be aware of?
Mechel: Seniors are being targeted in regards to reverse mortgage scams because as the economy continues to take a downturn, the reverse mortgages are on the rise so that seniors can tap into their home’s equity in order to continue to pay their bills on a monthly basis and not feel the tight pinch of being on a fixed income. So the scam that’s involved in that is where someone wants you to take a reverse mortgage out on your home, but they want you to do something else in addition to that like get an annuity or some type of insurance product with your reverse mortgage. And that’s where it’s not a good deal for the consumer. It may not be illegal, but they’re not getting the best deal for their money. So what you should do, if you have been targeted to get a reverse mortgage and they’re telling that you also need to get an annuity or some other product, is you need to get second opinion. You need to call a HUD-certified credit counseling agency who can counsel you on what are the pros and cons of taking out a reverse mortgage and give you the facts about whatever the opportunity is you’ve been presented with.
If you think you have been a victim of a reverse mortgage fraud or you have a question about it, call HUD’s hotline at 1-800-347-3735. And they can answer your questions. You can also call us. That number is 1-800-251-2227. We are a HUD-certified credit counseling agency, and we do reverse mortgage counseling. So feel free to pick up the phone to give us a call as well. Steve: Are reverse mortgages a good idea for most elderly couples who are struggling a bit financially?
Mechel: Well, that’s where the benefit of counseling comes into play. Everyone is different. Every situation is different. So we would talk to you directly, find out what your needs are and what your situation is, and figure out together if the reverse mortgage is the right thing for you to do. Steve: And for those of us who have elderly parents, keep an eye on what they’re doing. Often they may not want to share their entire financial situation with you. But I think as adult children, we have a responsibility to at least keep an eye on what they might be getting involved in and what they might not understand. Mechel: Even if they don’t want to share all of their personal finances, give them some phone numbers that they can call where they can talk to someone directly and get their questions answered. A reverse mortgage can be a complicated process. But if you have the right people in your corner to answer your questions, they can make it simple for you. Steve: Great information. Thanks, Mechel. Mechel: Thank you.