Commentary

MILAM COUNTY T.R.I.A.D.

Reverse mortgage a big scam target for seniors
Ted Hubert

The way to find financial security for the elderly, according to the television ads, is to take advantage of a reverse mortgage. Some very recognizable celebrities are paid big bucks to sell the program. The company will send all the information you need to get a large sum of money upfront to pay for unexpected emergencies. You can select options that determine the percentage rate status to fixed or flexible as it mirrors the ups and downs of current federal rates.

You have no set amount to pay monthly, there is never a late charge and your money you invested in your home is given back, for your use, anyway you want to use it. There are no downsides explained in these ads. Is it because there are no negatives in reverse mortgages, or, are the negatives secrets not to be shared? If it sounds too good to be true, it probably is. Remember, also, all that glitters is not gold.

Here are some of those secrets revealed. Look for fees that are attached to the loan, high interest rates, and higher closing charges that are explained as little as possible. All of this is told as you are given page after page after page of legal papers to sign. The borrower agrees and signs the dotted line as instructed. The agent processing the loan is a specialist that travels wherever needed, so, the idea, of having these documents over the weekend is never offered and are seldom requested.

You are not expected to pay off the reverse mortgage loan. You get your money when the house sells. However, if you die or leave the residence the full loan payment is demanded. This could mean that your heirs would not get the home. Is this really what you want? Think about it. The loan can be as much as two-thirds value of the property.

If you make no payments, then the house reverts to the loan company at your death or when you no longer reside in the home. You are considered moved, when you have not lived in the home for a year. You cannot move without paying the loan in full each month. If you do not pay on the loan, the interest rate for the month is added to the balance. Is this what you want?

You are still obligated to pay the taxes and you must pay the insurance on the home plus providing maintenance on the place. Those defaulting on these conditions will trigger the call to pay the loan in full. This information pertains to the legal reverse mortgage transactions. Keep reading.

Just how popular are these homeowner/reverse mortgages? It is estimated that between the years 1999 and 2008, reverse mortgages increased more than 1,300 percent. This statistic gets the attention of con artists. This opens many possibilities. as far as their target selections go. Senior citizens about to loose their homes through foreclosure are desperate. How can this foreclosure be prevented or forestalled? This is when the scammers enter with a plan.

With the help of a dishonest appraiser, the con artist gets the homeowner to apply for the reverse mortgage. During the closure the property title is signed over to the crooks. The victim walks away without funds or the property.

The scammer may work with a phony financial institution which informs the landowner that the application for the reverse mortgage was denied, however, there is another loan available, if they are interested. At the closing of the loan the property is signed away from the owner.

The Equity Theft scam requires delicate planning as well. The team of thieves includes a phony settlement attorney. The team of criminals will find property which has been neglected. Once the home is purchased an elderly person or couple to buy the home and apply for a reverse mortgage.

The appraisal value of the property is inflated, of course so the amount of money is much more than it would have been otherwise. Bottom line is the new property owners get nothing, as the team of con artists, abscond with the money leaving no cash for the couple. There is no equity either.

Senior citizens are solicited through advertisements, to live in a home free, so they will qualify for reverse mortgage benefits. The elderly person either dies or moves away and the bank making the loan is left holding the bag. The loss comes from the phony appraiser that inflated the value of the property. Financial institutions are scammed also. These thieves are interested in money and they have no feelings about who gets hurt through these schemes.

Are you familiar with the re-conveyance deed? “A deed of re-conveyance is a legal instrument which conveys title from a trustee back to the borrower under a mortgage once the mortgage has paid out. Meaning, once your mortgage has been paid for, you will receive a deed of re-conveyance to show proof of the paid mortgage.”

Con artists send out letters charging for these forms. They get thousands of dollars for this service. Here is a tip. You can download these documents free on the internet. You can contact Housing of Urban Development (HUD) for all the information and forms free. Do not pay anyone for your re-conveyance deed. The re-conveyance deed should be on file with the lender.

Is reverse mortgage right for you? Check it out very, very carefully, then make your decision. Use google to learn of pitfalls. Go into the transaction with your wallet and eyes wide open.

MEETING— Now a quick follow-up on the Milam County Homeland Security/Milam County TRIAD program held June 4 in Milano. The audience was attentive, interested and eager to hear the facts about evacuation for safety reasons in Milam County. These programs are important. The handouts are designed to give accurate information in small spaces.

Susan Larson does an excellent presentation. If you need a program for your civic club, church, garden club or whatever, call 512- 455-3635 to schedule a MCHS/ MCT program. It is waiting for you. Mrs. Larson will return your call ted@myalpha1.com


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2013-06-13 digital edition



The burn ban for Milam County has been lifted. Burning is always prohibited in the county's municipalities.


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