The Dangers of Reverse Mortgages
St. Louis American
October 2, 2012
Rivas, Rebecca S.
While reverse mortgages can be beneficial for some people in certain situations, experts warn that seniors should be aware that predatory lending practices exist. The Federal Housing Administration (FHA) requires the homeowner, who must be at least 62 years of age, to attend a Home Equity Conversion Mortgage (HECM) counseling and information session prior to obtaining the loan. "A bank can't have a client sign on the dotted line without speaking to HUD-certified counselor," confirms Galen Gondolfi of Justine Petersen, which helps low-wealth individuals to develop financial assets. Gondolfi says clients should beware of individuals who knock on their doors. Additionally, he explains that as long as the homeowner pays the property taxes and homeowners association fees and keeps up with the property, the lender cannot take the home while he or she is still living and occupying the home.
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