Planet Antares Scam Solutions | Avoiding Reverse Mortgage Scams

Date: 2010.07.13 | Category: How to | Tags: avoid,consumer tips,homeowners,How to,mortgage,planet antares complaints,Planet Antares Scam,reverse mortgage,scammers,scams

A “reverse mortgage” is a type of home equity loan that enables a homeowner to cash out some of his or her equity in the property.  Unlike a home equity loan, there are no monthly payments to make; the lender recovers its interest in the property when the homeowner dies or moves. Often, reverse mortgages aren’t available to people who are not at least 62 years of age.  Additionally, the lender may require that the homeowner own the home outright or have a very low mortgage balance on the home.  Homeowners must also keep the taxes and insurance on the property current.

Older homeowners are especially vulnerable to reverse mortgage scams.  A scammer may put pressure on a homeowner to take a reverse mortgage, then use the proceeds of the loan to invest in a risky or worthless venture.  Other scams may fool the homeowner into signing away ownership of the home, or trick the homeowner into co-signing on a loan with a third-party or allowing the home to be used to as collateral for someone else’s loan. Yet other reverse mortgage scams simply generate sales commissions, so unscrupulous salespeople have an incentive to pressure homeowners into applying for a reverse mortgage they don’t really need.

Legitimate reverse mortgages don’t force homeowners out of their homes if the homeowner exhausts all of the equity in the home.  Scams, on the other hand, may force an elderly homeowner to vacate the home with nothing other than their possessions.

The decision to take a reverse mortgage should be well thought out. Even if a reverse mortgage is entirely legitimate, the availability of cash is based on the owner’s equity in the home. In a softening real estate market, the homeowner may find himself with no cash or equity, and unable to sell his home.

To avoid being scammed on a reverse mortgage scheme, here are a few tips.

Avoid sales people who apply a lot of pressure on you to take a reverse mortgage. A reverse mortgage may be one way for you to tap into the equity in your home, but you may not need a reverse mortgage, or you may have other financial options that are more suitable for you.

Consult with an attorney before taking a reverse mortgage. The attorney can explain all of the risks of a reverse mortgage, and help you devise ways to protect yourself. Do not use an attorney recommended by the company proposing a reverse mortgage.

Have an attorney review all paperwork related to a reverse mortgage, should you opt to take one.  The attorney can spot liabilities and non-standard clauses in a proposed reverse mortgage.

Consult with a financial advisor before taking on a reverse mortgage. If you’re experiencing financial pressures, an independent financial advisor may be able to help you manage your finances in a way that eliminates the need for a reverse mortgage.