Because of their scrupulous practices of the last 5 years, Mortgage Brokers are looking for business. Seniors beware, they are preying on u!
The loans called reverse mortgages seem too good to be true. Do the math urself on AARP and u will learn that u only qualify for 1/3 of the value of ur house, even if the mortgage broker told u 1/2 of an overblown quick estimate.
U need counseling. So u pay the fee up front over the phone (from $75 to $125). While ur thinking ur going to go to a class with other seniors with whom u can exchange notes, a man comes on and speed reads a number of pros and cons u read already online and that is it.
A week later the appraiser arrives. Remember he depends entirely on the mortgage broker to make a living. Within 20 min he appraises ur home for far less than the broker estimated and recommends a new a/c, a new roof and new doors and windows and paint in and out. He demands his fee up front. If u pay him ur duped coz his fee is payable at the closing. If u don't follow that (or have an attorney follow that) u'll pay twice. So u pay him up front thinking that the loan will arrive next. Wrong.
Next inspectors arrive and give a quote for the roof, the a/c, the painting and repairs. The sum of these quotes cover most of ur anticipated loan. Despserate, u sign the repair contracts, hoping the closing will be soon.
The closing comes and woopdeedoo the broker shows u a clear report on all the repairs. Ur stunned coz no repairs were ever done. The broker deducts the sum of repairs and gives u the rest of the loan. Not enough to pay the real estate taxes for the next 5 years.
The broker lies about the inspection fees being payable up front. They are not. All fees are payable at the closing. The broker lies that if u do the repairs urself and do the painting urself, the contractor can give u a clear report for free. Sure. Who would make a free inspection and give a free clear report and make no money on the job?
I tell u, Reverse Mortgages are a perverse scam. It puts the mortgage broker in a position of power. Like never before, he brokers that power over appraiser and contractors alike to fleece the senile citizens, and the government guarantees it.