You may have seen some headlines about reverse mortgage fraud. But I want to clarify that what is often being called reverse mortgage fraud is not really reverse mortgage fraud.
- It is NOT reverse mortgage fraud when a senior who has a reverse mortgage and has a child or grandchild who scams their parent of money. It is theft, financial exploitation, and abuse by the child or grandchild! Children and grandchildren also steal, financially exploit and/or abuse seniors who don’t have a reverse mortgage.
- It is NOT reverse mortgage fraud if a Power of Attorney misuses the funds from a senior’s reverse mortgage. It is financial exploitation and abuse by the Power of Attorney, not of, or because of, the reverse mortgage.
- It is NOT reverse mortgage fraud when a title company’s closer doesn’t follow the regulations (as the story in the recent Wall Street Journal reported) and they take the money the lender sent to pay off a borrower’s current liens. It is theft and fraud by a title company’s closer and can, and has, happened with conventional loans.
As unfortunate as these situations are, they are NOT reverse mortgage fraud and the media should not call it such.
Let’s look at an analogy: If a store selling TV’s is robbed because the thief was enticed and wanted the TV it is the person who did the stealing that committed the crime, not the TV manufacturer. In this scenario the store represents the senior, both are victims. The money or reverse mortgage funds are represented by the TV. And the lender, provider of the reverse mortgage funds is represented by the TV manufacturer and provider of the merchandise.
So this is not fraud by the TV manufacture just because the thief stole the manufacturer’s TV. Nor is it reverse mortgage fraud just because the reverse mortgage provided the funds for someone to steal from or abuse a senior.
Do you we see the media publishing articles that TV manufactures committed fraud when one of their TV’s was stolen? Then why does the media and politicians accuse reverse mortgage lenders of fraud when someone else is committing the crime? Why are the words reverse mortgage used in the same sentence as fraud in these types of circumstances?
For the facts the media should know read my previous posts:
- “The Media Needs The Revesre Mortgage Facts“
- “But Wait, There’s More…Reverse Mortgage Facts The Media Needs To Know“
© 2009 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648
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