At Evans Law, our financial elder abuse attorneys and bank fraud attorneys witness all forms of fraud and deceptive practices thrust upon seniors and retirees. Some practices, however, aren’t as obviously harmful as others. A reverse mortgage is one such financial option that appears beneficial in its inception but can ruin the borrower’s finances.
In a reverse mortgage, a borrower (over age 62 by law) receives a cash payout based on the equity he or she has in their home. In a plan that appeals to seniors, the mortgage payback is deferred until the borrower dies, moves out of the residence or sells the home.
What many banks and lenders neglect to mention, however, is that the repayment of a reverse mortgage will greatly exceed the cash received because of high origination costs, interest and fees. In fact, the costs of these loans over time far exceed the benefits for seniors and their families. These loans can also result in forced eviction of a surviving spouse or family living at home when the borrower dies and the lender forecloses if the loan is not repaid.
At Evans Law, we represent seniors who have been sold a reverse mortgage even though they suffer from dementia or other cognitive impairment or because the selling broker or lender has convinced the senior to purchase another product such as an annuity with the mortgage proceeds. We look for signs of financial elder abuse, negligence, over-reaching and fraud to see if our client was persuaded to take a reverse mortgage as a result of unlawful activity on the part of the bank or the lender and whether the broker or lender convinced the borrower to buy an annuity or other financial product with the proceeds.
For more information about the disadvantages and pitfalls of reverse mortgages, read our article published in the American Association for Justice and contact our law firm to schedule free initial consultation.