"A senior may not know they are eligible for $100,000 in equity for their home — they may think it’s only $60,000,” said Elisabeth Daniels with Nevada’s Fight Fraud Task Force. “If they get fraudulent counseling, when the loan goes through, the counselor goes and takes the extra money they didn’t know they were eligible for," she said.
Its not clear how the counselor would get their hands on the money and an email to Nevada’s Fight Fraud Taskforce wasn’t returned at press time. According to Nevada’s Fight Fraud website, they’re referring to an Ezine article from 2006 which said:
In a recent Detroit-area fraud case, a corrupt lender was able to keep the borrower in the dark about the amount she was eligible to borrow. She thought her loan would be for $61,000 when in fact she was borrowing $103,000. Guess who pocketed the $42,000 difference? A thorough counseling session would have given the homeowner an accurate idea of the true amount she was eligible for. Unfortunately for the victim, the prosecutor in the case says this never happened:
"A counseling meeting explaining the reverse mortgage process was required by Financial Freedom before the loan could be processed. Mr. James allegedly informed Ms. Schultz that he would be able to waive the counseling meeting by just asking a few questions over the phone."
Has anyone run into this “fraud counseling” before? It’s the first time I’ve heard anything about it.