The Pitfalls of Reverse Mortgages
Complicated AND Expensive
Seniors in Contra Costa County and throughout the State of California are often approached to take out reverse mortgages on their homes. Typically, these seniors have substantial equity in their home and the home’s value has appreciated significantly over the years. On the other hand, the senior may have drastically reduced income following retirement (you have to be 62 or older to qualify for a reverse mortgage) and surviving on a fixed income. A typical broker sales pitch is to “reverse mortgage” the home’s value and generate cash to supplement income. Don’t let the product name fool you – you ARE borrowing when you take out a reverse mortgage. Elder abuse attorneys at Evans Law Firm Inc. have experience with reverse mortgage cases and may be able to help you if you or a loved one has lost money on a reverse mortgage transaction. Call us today at (415)441-8669. We only handle cases in California.
What to Watch F
The origination fees and subsequent interest rates on reverse mortgages can be steep and at maturity or death the home belongs to the bank, not you or your estate. As you can tell, the stakes are high and taking out a reverse mortgage is a potentially dangerous decision. Federal law has some protections against abuse in these transactions and California is a State leader in protecting its seniors from predatory practices. There are mandatory counseling rules, cooling off period minimums, and cost disclosure requirements. Brokers and lenders must strictly follow these rules. If they do not follow the precise rules, you may have grounds for rescinding the mortgage and seeking damages. The California Insurance Code also expressly prohibits the cross-selling of annuities with reverse mortgages. You cannot be forced – or enticed – to use the proceeds of your reverse mortgage to purchase an annuity. Once you qualify and subsequently close on a reverse mortgage, what you do with the proceeds is up to you. You can’t be coaxed into purchasing an annuity or any other insurance product.
Seek A Disinterested Opinion
Above all, if you are considering a reverse mortgage, seek out the advice of a professional not interested in the transaction. These are dangerous and expensive products and you need to learn all about them before you move forward in considering one. Don’t trust the lender to give you the facts and do not allow the lender to attempt to “tie in” other products to your loan. Remember that at death the lender will take the mortgaged property unless your heirs are able to pay off the indebtedness completely.
If you or a loved one has lost money on a reverse mortgage or been the victim of financial elder abuse or fraud in a reverse mortgage transaction in Contra Costa County or in any California county, contact the Evans Law Firm elder attorneys at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.