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Reverse Mortgages on The State of Florida’s Watch List?


In the article Beware of bogus debt relief, Orlando Sentinel journalist Richard Burnett writes that America’s economic recession has unleashed a plague of schemes, scams, and dubious sales tactics targeting people with financial woes.  "You have a lot of people out there who are desperate to get their lives and their debt under control," said Victoria Heller, a spokeswoman for Florida Attorney General Bill McCollum.

The state has tracked a major increase in complaints about suspected mortgage fraud this year. The biggest offenders are companies that offer "foreclosure or mortgage-rescue" services, said Scott Palmer, head of the state’s mortgage-fraud task force.

According to the article, the state of Florida has the reverse mortgage business on its “watch list”, even though there have been few complaints year to date.  "The reverse-mortgage business is a safe, very well-regulated business, and it offers seniors some incredibly flexible cash-flow options," said Meg Burns, director of single-family mortgage products for the Department of Housing and Urban Development. "But what we’re concerned about is when someone selling a reverse mortgage starts trying to take control and tell seniors what to do with their money."

Still, some seniors aren’t happy about their reverse-mortgage. Lois Radley, 67, an Orlando resident who took out a reverse mortgage in early 2008, said that she had to pay $12,000 upfront, including fees, taxes and closing costs. And her monthly payout is half of what she expected.

"I was never told they’d be taking that much out of my monthly income," Radley said. "Now I’m stuck with it, and I still don’t have enough money to pay my bills. . . . I just want other seniors to know that this is what could happen if they aren’t careful."

Beware of bogus debt relief (Orlando Sentinel)

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