Tags: reverse mortgage | scam | elderly

Elderly Suffer From Reverse Mortgage Scams

a graphic showing a reverse mortgage application, a calculator and a pair of glasses
(Fotolia)

By    |   Wednesday, 12 June 2019 09:58 AM

A generation of families fell through the cracks of federal efforts to protect seniors from unscrupulous lenders pitching reverse mortgages and continue to suffer from these loans set up a decade ago, USA Today discovered in a review of government foreclosure data.

These elderly homeowners were convinced to borrow money through the program while the risks and requirements were glossed over. When they missed a paperwork deadline or fell behind on taxes or insurance, lenders moved swiftly to foreclose on the home, which wiped out hard-earned generational wealth.

Especially hard hit were lower-income, black neighborhoods, which were targeted by the unscrupulous lenders. Siome 100,000 loans have failed.

USA Today, in a first-of-its-kind analysis of more than 1.3 million loan records, discovered that reverse mortgages end in foreclosure six times more often in predominantly black neighborhoods than in those that are 80 percent white.  

Even comparing only poorer areas, black neighborhoods fare six times worse. 

Stephanie Moulton, associate professor of public policy at Ohio State University and the nation’s leading reverse mortgage researcher, said cash-strapped minority borrowers were easy targets for unscrupulous reverse mortgage lenders who took advantage of a market avoided by traditional lenders.

“These areas had demand, and they couldn’t access credit any other way,” she said.

It is not only those scammed who are hurting, as the public also pays a steep price. Reverse mortgages are insured by a Federal Housing Administration fund, which is in the red more than $13.6 billion because of an increase in claims paid out to reverse mortgage lenders since the recession.

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A generation of families fell through the cracks of federal efforts to protect seniors from unscrupulous lenders pitching reverse mortgages and continue to suffer from these loans set up a decade ago, USA Today discovered in a review of government foreclosure data.
reverse mortgage, scam, elderly
259
2019-58-12
Wednesday, 12 June 2019 09:58 AM
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