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1. Identify Common Scams
The three most common financial swindles are lender impersonation scams, foreclosure relief scams, and rental scams. A lender impersonator might strongarm you and demand payment to avoid foreclosure on a property. In a foreclosure relief scam, people posing as lenders and/or attorneys will target struggling homeowners and offer cash assistance. In rental scams, a scammer who is posing as a rental representative will ask for cash upfront to hold an apartment for you. You pay him and you will never hear from him again.
2. The Importance of HUD/Reverse Mortgage Counseling
If there’s one major mistake financially strapped consumers make during times of high economic stress, it’s signing legal documents they do not fully understand. This is why counseling is not only the law, it is absolutely necessary for those potential lenders who wish to know precisely what they are getting into. Certified housing counselors and reputable reverse mortgage lenders will walk you through the lending process every step of the way and you will not sign any legal, financial documents until you can fully comprehend them.
3. Identify Red Flags
The Washington Post reports that if a company suggests you stop paying your rent or mortgage for any reason, they are likely a scam outfit. Also, those in financial duress should never reveal personal financial information, including your social security number, without knowing precisely who you are speaking with. “Third party scams” are more prevalent than the COVID-19 virus, and they can cost you tens of thousands of dollars with just one nervous slip of the tongue. If you happen to come into contact with someone offering much needed financial assistance, demand to see a list of credentials and only then, do your own research of the company they represent. You can also reach out to your mortgage lender or rental agent for assistance in these sensitive matters.
4. Report Strange and Suspicious Activity
If you should happen to fall into the trap of being victimized by financial scammers, you need to report it to the proper authorities such as the Federal Trade Commission and/or the State Attorney General’s office. This might sound like an obvious course of action, but some people are too afraid to alert the authorities, fearing some kind of retribution on the part of the scammer.
5. Lenders Must Educate Themselves and Remain Vigilant
With the economy still in decline due to the pandemic, lots of folks, especially older folks are in danger of losing their homes. In 2021, widespread foreclosures and evictions are an all-too-common reality. But by educating yourself about the financial opportunities available on a state and federal level, you will be informed of your financial rights and choices.
Times of economic crisis and pandemic are rife with scammers looking to prey on hardworking people who have been paying their rents and mortgages religiously month after month after month. If you find yourself facing down financial hardship and need extra cash just to get by, you need to seek out the professional counseling of a trustworthy reverse mortgage lender and/or other reputable financial institution before signing any legal documents.