The FBI and the U.S. Department
of Housing and Urban Development Office of Inspector General
(HUD-OIG) urge consumers, especially senior citizens, to
be vigilant when seeking reverse mortgage products. Reverse
mortgages, also known as Home Equity Conversion Mortgages
(HECM), have increased more than 1,300 percent between 1999
and 2008, creating significant opportunities for fraud perpetrators.
Reverse mortgage scams are engineered by unscrupulous professionals
in a multitude of real estate, financial services, and related
entities to steal the equity from the property of unsuspecting
senior citizens aged 62 or older or to use these seniors
to unwittingly aid the fraudsters in stealing equity from
a flipped property.
In many of the reported scams, victim seniors are offered
free homes, investment opportunities, and foreclosure or
refinance assistance; they are also used as straw buyers
in property flipping scams. Seniors are frequently targeted
for this fraud through local churches, investment seminars,
and television, radio, billboard, and mailer advertisements.
A legitimate HECM loan product is insured by the Federal
Housing Authority (FHA). It enables eligible homeowners
to access the equity in their homes by providing funds without
incurring a monthly payment. Eligible borrowers must be
62 years or older who occupy their property as their primary
residence and who own their property or have a small mortgage
balance. See the FBI/HUD Intelligence Bulletin for specific
details on HECMs as well as other foreclosure rescue and
Seniors should consider the following:
not respond to unsolicited advertisements.
suspicious of anyone claiming that you can own a home with
no down payment.
not sign anything that you do not fully understand.
not accept payment from individuals for a home you did not
Seek out your own reverse mortgage counselor.
If you are a victim of this type of fraud and want to file
a complaint, please submit information through the FBI electronic
tip line or through your local FBI office. You may also
file a complaint with HUD-OIG at www.hudoig.gov
or by calling HUD’s Hotline at 1-800-347-3735.