Scam Alert: Turn the table on reverse loans

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THE SCAM: Reverse mortgages

HOW IT WORKS: A reverse mortgage allows homeowners to tap into their equity for income, usually over a fixed period of time. The idea is that the homeowners, often elderly, can use reverse mortgages to stay in their homes. When the home is sold, the reverse mortgage is paid off. But some con artists will try to sell the mortgage as a way to upgrade a homeowner's lifestyle or as a way to get into another investment. Financial experts caution about this type of mortgage, especially if it's not certified by the U.S. Department of Housing and Urban Development. Such mortgages can generate commissions and fees for those who sell them, but homeowners can get so far in debt that they lose a home they once owned free and clear.

WHAT'S AT STAKE: Your home

HOW TO BEAT IT: Do your homework on reverse mortgages. A list of HUD-certified reverse mortgage lenders can be found at www.hud.gov/ll/ code/llslcrit.cfm. Homeowners getting a HUD-certified reverse mortgage must undergo counseling. If the offer doesn't include counseling, and the lender isn't certified, be doubly careful.

Contact Bee staff writer Ben van der Meer at bvandermeer@modbee.com or 578-2331.

For past Scam Alerts, go to www.modbee.com/business/scam.