Nevada Task Force Warns of Fraudulent Reverse Mortgage Counseling

image Channel 8 in Las Vegas is reporting that scammers are targeting seniors through reverse mortgages using a tactic called fraud counseling.

"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.

image

Advertisement

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.  

Reverse Mortgages New Targets for Scammers

Join the Conversation (10)

see all

This is a professional community. Please use discretion when posting a comment.

  • That was a lender scam..it was first released in the Wall Street Journal a few weeks ago. What happens with the counciling is not going to be as strong as what the LO and Lender do. They don't rely as much on the that information as what the Loan officer puts in front of them.

      • It is not wide spread at all…it is actually very hard scam to pull off. What happened was the paper work the senior signed was all good except the sheet that had the loan totals..that was where the sam was. So the senior saw on the sheet they weree getting one amont but they actuially signed for a different amount. If you have ever closed on a house you know very few people go through and look at the nearly 50 or more pages they have to sign. So the lende is the one who cuts the check to the senior and they with held a specific amount.

        I have done over 300 reverse mortgages and I have never heard of this happening..it is a very rare crime to be able to pull off.

  • It is ultimately impossible for the counselor to rob a senior in this fashion. No investor would allow more than a $125 fee on the HUD so please tell me….how would the counselor obtain these type of funds??

  • I do not think I have witnessed one completely accurate television news cast regarding reverse mortgages. They always get some of it right and some of it wrong.

  • The person being interviewed is uneven and unsure of what she is saying. The warnings seem as if this particular scam is occuring in Las Vegas right now when that is probably not the case at all. It looks like she needed a story so the interviewer and she worked out a nonexistent situation in Las Vegas. The problem is these stories have a life of their own.

string(110) "https://reversemortgagedaily.com/2009/09/09/nevada-task-force-warns-of-fraudulent-reverse-mortgage-counseling/"

Share your opinion