- Category: Widget
- Published: Wednesday, 10 February 2016 11:03
- Written by Isaac
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5 Tips for Avoiding Reverse Mortgage Scams
Reverse mortgages are growing in popularity, prompting scam artists to target homeowners in an effort to steal their equity, warns Victory State Bank.
Seeking to protect unsuspecting homeowners from reverse mortgage fraud, Staten Island’s only community-based business bank is sharing information from the FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG). The government agencies are urging consumers, especially senior citizens, to be vigilant when seeking reverse mortgage products.
The popularity of reverse mortgages, also known as home equity conversion mortgages (HECM), has created significant opportunities for fraud perpetrators.
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.
Tips for Avoiding Reverse Mortgage Scams:
1) Do not respond to unsolicited advertisements.
2) Be suspicious of anyone claiming that you can own a home with no down payment.
3) Do not sign anything that you do not fully understand.
4) Do not accept payment from individuals for a home you did not purchase.
5) 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 our electronic tip line or through your local FBI office. You may also file a complaint with HUD-OIG at www.hud.gov/complaints/fraud_waste.cfm or by calling 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: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online at www.VictoryStateBank.com.