Beware Fake Reverse Mortgage Scenarios

 

 

Reverse mortgages have grown in popularity over the years. Although they offer a means for retirees to withdraw some of their home equity, the concept provides scam artists with an opportunity to defraud homeowners, cautions Staten Island’s only community-based business bank.

To help protect homeowners from such fraud, Victory State Bank is spotlighting a warning from the FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG), urging consumers – especially senior citizens, to be vigilant when seeking reverse mortgage products.

AS THE FBI EXPLAINS:

Reverse mortgage scams are engineered by unscrupulous professionals in a multitude of real estate, financial services, and related companies to steal the equity from the property of unsuspecting senior citizens 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 through local churches and investment seminars, as well as television, radio, billboard, and mailer advertisements.

A legitimate HECM loan product is insured by the Federal Housing Authority. 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 investment schemes.

 

To assist consumers in avoiding reverse mortgage scams, Victory State Bank is sharing these five tips from the FBI:

  • Do not respond to unsolicited advertisements.
  • Be suspicious of anyone claiming that you can own a home with no down payment.
  • Do not sign anything that you do not fully understand.
  • Do not accept payment from individuals for a home you did not purchase.
  • Seek out your own reverse mortgage counselor.

 

WHERE TO FILE A COMPLAINT

If you are a victim of this type of fraud and wanwant to file a complaint, please submit information through the FBI’s electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG; HUD’s hotline at 1-800-347-3735.

 

 

ABOUT VICTORY STATE BANK

VSB Bancorp, Inc. (OTCQX: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island, including the main office in the community of Great Kills and branches in West Brighton, St. George, Dongan Hills and Rosebank.

A planned sixth branch, to be situated in Meiers Corners, has received both regulatory and building department approvals.

For additional information, Victory State Bank may be reached at 718-979-1100, or visited online at www.VictoryStateBank.com.

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