an empty home
As the recession worsens and people become more desperate, reverse mortgage fraud has increased. The type of fraud I am speaking of is not being commited by lenders but by “homeowners”.
In Florida, a lender recently reported declining 15 reverse mortgages due to “questionable occupancy [characteristics].” In other words, they did not believe that the senior lived in the home they were taking out a mortgage on. The firm now requires interior photos of the home complete with dishes, blankets, and food to prove that the homeowner actually resides there.
Between an appraisal and photographs of the home, with adequate due diligence this should be an easy type of fraud for lenders to watch out for and effectively thwart. Seniors should also be aware that they may be asked for proof of occupancy when they apply for a reverse mortgage as a safeguard against fraud.
Stay tuned tomorrow for the second article in our fraud series: Power of Attorney Fraud