Over the last five years, we have heard a various amounts of feedback from clients relating to disturbing business practices from unscrupulous Reverse Mortgage Lenders.
The worst story we were told was from a man who had gotten a Reverse mortgage from a company called “X MORTGAGE COMPANY” From what we were told by the client of X MORTGAGE COMPANY was almost hard to believe, but we feel strongly that you need to know this.
The man told us that after he got his Reverse Mortgage,X MORTGAGE COMPANY started sending him letters that this certain inspection needed to be paid for and that needed to be paid for and after a while the man felt he was being pushed from his home.
The client ofX MORTGAGE COMPANY also made mention of his home being broken into by what he felt was shady characters that were working for the bank. The client actually told us thatX MORTGAGE COMPANY asked him to leave the house forcefully by sending a thug to his home. Luckily, the client at six foot three inches even at age over 65 was able to send the thug out of his home bloodied up.
This is a horrible story, from a client who took a Reverse mortgage from a bank with very questionable “Fair Trade Practices and Shady investors”.
Another client told us that the bank that tried to sell them a reverse mortgage told them that after they survivor of husband and wife takes that final stairway to heaven, that the house title goes directly to the bank.
This is another shocking story because the FHA guidelines for reverse mortgages do not work that way. With a true FHA reverse mortgage, when the surviving homeowner who has a reverse mortgage goes to heaven, the family and heirs have 6 months to sell the property and take the rest of the equity.
So what this client was told was a lie. The mortgage program he was being sold was not an FHA mortgage, it was a private loan program that appears to function like a reverse mortgage, but is not a reverse mortgage. This type of home loan marketing to the elderly is ugly and a disgusting interpretation of what the government rules and guidelines set forth are for what is called “FAIR TRADE PRACTICES”.
The purpose of this report is to make sure you are protected from shady bank practices , especially in dealing with the elderly and their reverse mortgage home loans.
This is why it is imperative that you only get quotes from a reputable reverse mortgage company.
How to recognize bad home lending practices and companies.
A bad lender will resist in providing you a “Good Faith Estimate” A Good faith estimate is an excellent shopping tool because you can see all the closing costs and can compare that estimate with others.
A bad lender will give you what is called a “Low Ball Quote” whereby they give you a low quote initially then at closing the costs are much higher. This also goes by the name of bait and switch.
The bad lenders will lie about closing fee’s and surprise you at closing. They will tell you that the real estate valuation of your home is worth much more that what the real estate valuation web-sites of zillow.com and homes.com
Low ball quotes are dangerous because you think you have a great deal but the estimate is not true and you will throw away all the other estimates thinking you did a great job in shopping but what that low ball quote really did was take you out of the market and set you up for a horrible closing experience
A bad or questionable Reverse Mortgage home loan company or loan officer will not provide you a good faith estimate unless you do this or that, in the form of being asked to pay for the appraisal first or being asked to go through a required government consultation first. This is a violation of “The Home Owners Equity Protection Act”
It is literally being asked to take your loan into processing without having the opportunity to shop for the best deal. That may be good for the lender, but this type of business practice is obviously not in the best interest of the consumer or his or her family.
How to recognize a true Reverse Mortgage Professional
How to know when you are speaking with a true Reverse Mortgage professional that only has you and your family’s best interest in mind.
A true Mortgage professional will tell you what you need to hear, not what you want to hear.
The True Reverse Mortgage professional will first ask you what you are trying to accomplish with a reverse Mortgage loan first. The next thing a true home Mortgage professional will do is educate you on exactly how the Reverse Mortgage program works before going over the different Reverse Mortgage options that you have.
The final step for a True Reverse Mortgage specialist is to assist you in determining which Reverse Mortgage program will best suit you and your family’s needs.
Keep in mind that above costs and fee’s, choosing the right program is the number one priority and here is an example: If you had two loan proposals from two different banks and compare closing costs.
One proposal shows very low closing costs on a full lump sum pay-out of let’s say $300,000 but the other proposal is a line of credit with a higher interest rate and closing costs, you may think “Wow the three hundred thousand dollar reverse Mortgage loan is the way to go!
But is it really? At 5% every year you will owe an extra $15,000 on the home,
This means that every year, the potential inheritance to your Heirs will drop by $15,000 this is not good
Now the line of credit program that had a higher closing cost gave you the option to borrow the least amount which is $25,000 and even at 6%, the yearly interest expense is only $1500 a year.
So the closing costs may be lower with one reverse Mortgage Lending option, but the overall cost to the family is much less with the minimum line of credit option and this is exactly why choosing the right Reverse Mortgage option is the number one priority and this is exactly why the Good Loan officer will be asking about what you are looking to accomplish with a Reverse Mortgage and why he will ask about your family before he makes what we hope to be the most suitable recommendation for you and your family.
Reverse Mortgage Lenders Direct is committed in making sure you are educated properly and have every available opportunity to shop and determine which Reverse Mortgage program best suits you and your family’s needs.
Reverse mortgage only works with the most reputable reverse Mortgage institutions and every Reverse Mortgage Lender in our network must agree to maintain the highest lending standards established by the government relating to suitability of recommendations and what is called “Fair Trade Practice Laws” Especially when dealing with the Elderly.
Reverse Mortgage Lenders Direct is a leading top line advocate of providing you and your family every available opportunity to help educate you and help you shop and compare the best Reverse Mortgage options, loan terms and lowest fee’s
To take advantage of our free comparison service, simply fill out the contact information as well as best time to be reached and we will make the process of shopping for the best Reverse Mortgage program, as easy and painless as possible.
Remember, our number one priority is you and your family’s best interest and to help seniors find reputable HECM lenders.