Named in the lawsuit are Hartland Mortgage Centers Inc, based in Woodridge, Ill., and the Irvine, Calif.-based American Advisors Group Inc. and company president Reza Jahangiri.

Attorney General Lisa Madigan says…

These companies used extremely misleading language in their advertising, sometimes even disguising their loans as government benefits that borrowers don’t have to repay.

Lisa finds it unacceptable that Many consumers have reported that they didn’t even know these offers were for reverse mortgages or a loan of any kind.

If you are weighing reverse mortages pros and cons be sure that the company providing you the information does not present the program has a government benefit.  It is not.  A government benefit is something that every senior is entitled to and receives.  Although the HECM reverse mortgage program is insured by the FHA it is not guranteed to every senior that applies.

You can read the full story by clicking here.

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According to their website Reverse Mortgage Counseling Locator helps to easily locate counseling agencies. Anyone can quickly find nearby HUD-approved agencies by just entering a five digit zip code. Homeowners can review the agency list (five local, five national), and select the agency they desire, including those that offer money-saving options. Additionally the system provides directions to the locations and shows what type of counseling is available: in person, by phone, or by webinar.

The service also enables lenders to print or email counseling lists to prospective borrowers, along with the NCOA’s “Use Your Home to Stay at Home” and HUD’s “Preparing for Your Counseling Session” letter.  In addition, lenders have the ability to track which loan officers have sent out counseling materials to specific borrowers.

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The Southeast/Caribbean region received 22.25% of the total endorsements. States included in this region include:

Alabma
Florida
Georgia
Kentucky
Mississippi
North Carolina
Puerto Rico
South Carolina
Tennessee
U.S. Virgin Islands

Year over year total market share among the top 10 reverse mortgage industry leaders grew form 39% to 42.9%. According to the HUD’s HECM Endorsement Summary Report the nations top 5 lenders in November were as follows. The number to the right of the lender is the total number of national endorsements.

Wells Fargo – 1,491
Bank of America – 726
Metlife Bank – 346
One Reverse Mortgage – 303
Financial Freedom Acquisition – 210

All this seems to point to more lenders chasing fewer dollars in 2009.  The decrease in national endorsements is less likely due to decreased need among seniors than it is due to negative press about the reverse mortgage product.

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AARP Reverse Mortgage:

Unlike most newspaper articles or TV news reports that try to cover this complicated product in a two columns or two minutes, AARP dedicates a full 26 minutes to the key questions of consumer protection and avoiding abuses.

Included in the AARP news style report of the reverse mortgage are, two U.S. representatives (one Republican and one Democrat), a reverse mortgage industry insider, a consumer advocate, and a member of the media.

The AARP points out in an article in the Examiner.com that a recent survey they conducted revealed that 93% of those who have a reverse mortgage are glad they got one. However, it remains important to ensure older adults are protected when getting this type of loan.

Chairman of House Financial Services, Barney Frank is a “strong supporter of reverse mortgages” and his committee “improved it…(and) did some protection against people being defrauded” as part of the Housing and Economic Recovery Act of 2008.

Peter Bell, president of the National Reverse Mortgage Lenders Association noted that one of the industry’s challenges is that “newcomers coming into the business who don’t always understand the nuances” of the reverse mortgage. It is usually one of these newcomers who use the aggressive marketing or misleading sales tactics mentioned by the media.

The AARP raises an excellent point in stating that every profession has bad eggs and reverse mortgages are no different. There are unscrupulous lawyers, plumbers, financial advisors (Madoff, anyone?), politicians, teachers, CPAs, police officers, etc. Something I discuss with just about every borrower I meet with.

While no industry is immune to having some unethical salespeople, consumer advocate Suzanna Montezemolo of the Center for Responsible Lending, noted that “in a reverse mortgage…the loan itself often is not the problem.”

Unscrupulous people are the problem. They prey on older adults who are financially strapped and desperate for help. Sometimes convincing seniors to use their reverse mortgage proceeds to buy an annuity or other inappropriate financial product.

Due to the recent decline in the stock market, Mary Beth Franklin, Senior Editor of Kiplinger Financial Magazine, observed that some retirees are “using reverse mortgages as a bridge…for five to ten years until their investments recover” 

And her advice to “read all the information out there, look at other alternatives” is wise not matter what you are buying – a reverse mortgage or anything else. “You have to go into this with your eyes wide open”. 

With this in mind, AARP’s webcast should be recommended viewing for anyone exploring a reverse mortgage. It can be found at the following link AARP Inside E Street “Reverse Mortgage: Rescue or Trap?

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The number of FHA insured reverse mortgages, HECM’s for short, increased in September. Lenders endorsed 9,473 loans in September, up from 8,933 in August.

Below are the top 10 lenders listed according to year to date volume nationally.  The nations top reverse mortgage lender is Wells Fargo.  There was no change in the top 10 lender spots from August to September.

1. Wells Fargo

2. Bank of America

3. World Alliance Financal Corp.

4. Financial Freedom

5. One Reverse Mortgage

6. MetLife

7. Countrywide

8. Generation Mortgage

9. Urban Financial

10. 1st AAA Reverse Mortgage

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Reverse mortgages are becoming popular in America.  Reverse mortgages are a special type of home loan that lets a homeowner convert the equity in his/her home into cash.  They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.  However seniors need to be aware that there are lenders in the market that are well…let’s say less than honest.

If you are interested in a reverse mortgage, beware of scam artists that charge thousands of dollars for information that you can get for free.  While I advise caution you don’t have to be afraid.  Of the 4 million general complaints to the FTC between 2005 and 2008 only 50 have to do with reverse mortgages.  You can find all the information you need to know about reverse mortgages free on HUD’s website and on my Wells Fargo Reverse Mortgage page.

How to report reverse mortgage fraud

To report fraud or abuse in the reverse mortgage program contact your local homeownership center.

Free Reverse Mortgage Information

Reverse Mortgage Basics

How Reverse Mortgages Work

Important Considerations

Managing Equity

Things to beware of with reverse mortgage lenders

• Beware of copy  cat names, misleading symbols and claims about no payments when there could be taxes and insurance payments.
• Be aware that if your loan comes due, there is a payment required.
• The FTC warns borrowers to avoid shady marketing techniques with phrases like “government benefits” and “guaranteed to qualify”.
• Every senior homeowner 62 years or older does not qualify for a reverse mortgage.  In fact over the past two years due to declining home values many seniors who start the reverse mortgage process find that they no longer have enough equity in their home to qualify.

Considering a reverse equity loan call today for a free quote 1-877-311-7383.

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A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. FHA’s HECM provides these benefits. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

Some of the highlights are:

• Tax free dollars that can be used for any purpose.
• You retain the Title to your Home.
• You can sell your Home at Anytime.
• You can receive the Cash in Monthly Payments, A Lump Sum, A Line of Credit, or a Combination of the above.
• Social Security and Medicare are not affected.
• There are No Income, Credit or Health Qualifications.

You can learn more about reverse mortgages by calling 1-877-311-7383 or by visiting the HUD website on reverse mortgages.

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Reverse Mortgage Philadelphia

The consideration for the Mini HECM is due to the $800 million subsidy request to help insure the existing reverse mortgage program.

Meg Burns, Director of the Office of Single Family Program Development at HUD, said that its looking at offering a HECM “mini” along with the HECM currently available.

Currently being developed, the details are scarce but, Burns said the product gives seniors the means to receive a fixed amount of money with a smaller principal limit.

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Reverse mortgages have helped hundreds of thousands of seniors secure their retirement through additional guaranteed income.  While some Social Security recipients are waiting to officially hear if their payments go up or down next year, many have decided to act now.

Beatrice Jones, 71, of Paoli, Pa says she can’t wait.  She’s been in her Chester county home for 30 years and says she’s got to do something now, so she’s considering a reverse mortgage to help supplement her monthly social security income.

What is a Reverse Mortgage?

A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free* income—without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower (s) permanently leaves the home.

I’m here to help you through the process.  You have several choices to do an application.

• I can take your application by phone
• Meet you in your home, or
• Meet you at any Wachovia or Wells Fargo Bank location
  • We have locations in Montgomery County, Chester County, Delaware County, and Philadelphia County.

Call me today at 610-717-2879, or Toll-Free 1-877-311-7383.

P.S. Take my APPLES TO APPLES comparison test to the bank!

Take the time to compare and you win!  When you choose to work with me, you are guaranteed to get the best deal possible for your reverse mortgage.  Simply invite me to compare my Good Faith Estimate&Summary; with any of my competitor’s.

If I cannot beat their estimate in writing and provide you with the best deal possible, I will turn this certificate into $50 Cash.
(Must be on identical reverse mortgage products, restrictions apply)

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