Reverse Mortgage Class Action Lawsuits

Reverse Mortgages are becoming popular and in most cases a safe way for older Americans to gain greater financial security without having to cash in most of there hard earned investments. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more. However, as with any financial transaction, fees and other expense also come with this new financial instrument and whenever money is involved illegal or shady practice are sure to be found. Over the past several years there have been a number of reverse mortgage class action lawsuits seeking relief for these senior citizens.

Many of the complaints filed in these lawsuits alleged that lenders took advantage of the senior citizen’s need for cash income by selling then a “reverse mortgage”. Under the schemes attempted, seniors borrowed against the equity in their homes, as is allowed by law, however they were charges excessive fees and processing charges which were unrelated to the actual loan that was being provided. These fees were capitalized as part of the loan and thus subjected to compounded interest rates over the life of the loan. Utilizing these schemes, corporations were able to earn extremely large profits while providing very little in the long term for the senior citizens.

Another scheme which was utilized consisted of a required "life annuity" designed to replace the monthly loan advances after a number of years, in effect having the borrower fund the future monthly advances. The annuity is payable only to the borrower -- there is no death benefit -- and therefore, the if the borrower does not live long enough to see the maturity of the annuity, he or she receives absolutely no value, even though the loaner charges compounded interest on the costs of the annuity from the beginning to the end of the loan.

These reverse mortgage class action lawsuits purposes were to protect the elderly from an overly aggressive creditor. Many states have enacted legislation specifically addressing this kind of elderly abuse, recognizing that senior citizens are vulnerable to the predation of profit seeking financiers. The elderly, ought to be able to trust and rely upon their banks to treat them fairly. Lawsuits of these kind seek to protect a class of senior citizens who are often trusting and do not have the means to do it themselves. These suits have also brought the profits that are being made from reverse mortgage more in line with other financial products.



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HUD Establishes New Reverse Mortgage Counseling Guidelines - Reverse Mortgage Daily

HUD Establishes New Reverse Mortgage Counseling Guidelines
Reverse Mortgage Daily
They also must withhold the certificate if the client is being coerced into obtaining a reverse mortgage or is a potential victim of fraud. .
Consumers Start Petition Asking HUD to Release HECM for Co-OpsReverse Mortgage Daily

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Information About Reverse Mortgage | FactHippo.com
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HUD Establishes New Reverse Mortgage Counseling Guidelines
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Company appoints reverse mortgage specialist - NorthJersey.com

Company appoints reverse mortgage specialist
NorthJersey.com
Theresa Cannon of Westwood, has joined Wells Fargo Home Mortgage, a division of Wells Fargo Bank, NA, as a reverse mortgage consultant. .

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How to Use Reverse Mortgage to Your Benefit? : Wall Street Stocks .
A reverse mortgage is a financial instrument made available to individuals who have attained the age of 62 years or older to use the cash equity built up over the years in order to make mortgage payments. In a standard mortgage, ...


Former FHA official predicts 'pivotal' year for reverse mortgages - The Spokesman Review

Former FHA official predicts 'pivotal' year for reverse mortgages
The Spokesman Review
Former Federal Housing Administration Commissioner Brian Montgomery, who oversaw the nation's most popular reverse mortgage product for nearly five years, .

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Scams: A Sucker Retires Every Minute
Annuities. Reverse mortgages. Life insurance pools. Principal-protected notes. The options being offered to senior citizens hoping to ensure a comfortable retirement are dizzying. And in a growing number of cases, that may be the intention as more scammers--often elderly themselves--try to con retirees. Though hard numbers are difficult to come by, many lawyers and advocates for the elderly say ...


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