By Diane C. Lade, Sun Sentinel
4:49 p.m. EDT, July 9, 2011
Some sales people aggressively promote reverse mortgages, which allow senior citizens to convert their home equity into cash, as a way to take care of rising medical costs, unexpected home repairs or even travel expenses. But as South Florida's first reverse mortgage fraud case shows, seniors need to be very careful who they buy these complex products from and make sure they understand the risks.
Three local mortgage loan officers and a Pennsylvania title agent were charged in federal court last week in connection with a $2.5 million scheme that defrauded a major lender, the federal government and 14 seniors. Some of the seniors now face foreclosure. The suspects pitched the mortgages through a national telemarketing campaign, then fradulently inflated home values so homeowners would qualify, and never paid off the original loans, according to court filings.
http://www.sun-sentinel.com/business/fl-reverse-mortgage-qa-20110708,0,250773.story