Home Scam/Fraud HUD OIG warns about reverse mortgage scams in updated bulletin

HUD OIG warns about reverse mortgage scams in updated bulletin

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The U.S. Department of Housing and Urban Development (HUD)’s Office of the Inspector General (OIG) released a fraud bulletin last week that is aimed at keeping the American public informed about common types of scams that pose as legitimate reverse mortgage businesses.

In addition, the bulletin clarifies a number of facts regarding the Federal Housing Administration (FHA)’s Home Equity Conversion Mortgage (HECM) program and offers details about real reverse mortgage loan types — including HECM-to-HECM (H2H) refinances.

Loan complexity, reason for the bulletin

Older Americans are frequent targets of scammers, and in 2021, U.S. financial institutions filed 72,000 suspicious activity reports (SARs) related to elder financial abuse (EFE) — an increase of 10,000 filings year-over-year. The Consumer Financial Protection Bureau (CFPB) estimates that the dollar value of these scams has increased from $2.6 billion in…

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