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Reverse Mortgage-Fraud-Scam
In this scam, Home Equity Conversion Mortgages (HECMs) —or reverse mortgages— are exploited to defraud senior citizens of the equity in their homes. Perpetrators typically identify foreclosed, distressed, or abandoned properties using information contained within county deed records. Perpetrators purchase the properties using straw buyers who fraudulently claim to be using them as their primary residences. The perpetrators then recruit a senior to “purchase” the property from the straw buyer, typically through a deed transfer and no exchange of money. After the senior has lived in the home for at least 60 days, the perpetrators, with the aid of an inflated appraisal of the property, arrange for the senior to obtain a reverse mortgage and encourage the senior to request a lump sum disbursement of the property’s equity. The perpetrators then arrange for fictitious loans and liens that allow them to distribute the loan proceeds to themselves, the straw buyer, or others at closing.
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Home Mortgage Loan Scam to Watch Out for – Reverse Mortgage Fraud is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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