Reverse Mortgage Scam
Predatory reverse mortgage offers targeting homeowners over 62.
How This Scam Works
Scammer targets senior homeowners with a reverse mortgage offer that has hidden fees, inflated costs, or terms that transfer ownership away from the homeowner. Some scams involve fake reverse mortgages that lead to fraudulent home sales. Others use legitimate reverse mortgage products but with predatory fees.
Who's Most at Risk
Homeowners 62-75 with significant home equity, especially those who mentioned interest online or attended a "free seminar".
Red Flags to Watch For
- •High-pressure sales tactics
- •Fees or rates that seem too high
- •Contract too complex to understand quickly
- •Salesperson discourages you from consulting an attorney
- •Offers a 'free' home or cash for signing over the deed
How to Protect Yourself
- ✓Get HUD-approved reverse mortgage counseling before signing anything
- ✓Have an attorney review the contract
- ✓Never sign over your deed to receive money
- ✓Compare offers from multiple HUD-approved lenders
If You've Already Been Targeted
The most important thing after being targeted is speed — the first 24-48 hours give the best chance of stopping further loss. Take these actions in order:
- 1.Contact HUD at 1-800-569-4287 for HUD-approved reverse mortgage counseling
- 2.If you signed documents you didn't understand, contact CFPB and a real estate attorney immediately — some contracts can be rescinded within 3 business days
- 3.Stop all contact with the scammer immediately. Block phone, email, social media.
- 4.Contact your bank and credit card issuers to freeze accounts or reverse recent transactions.
- 5.File a report at reportfraud.ftc.gov and with your state Attorney General.
- 6.File a local police report — creates a legal record for insurance and tax purposes.
- 7.Consider a credit freeze at all three bureaus if identity information was shared.
Note:No legitimate agency will ask you to pay a "recovery fee" to get your money back. That's a follow-up scam by different criminals who've bought lists of prior victims.
Where to Report This Scam
Primary reporting: hud.gov/complaints, cfpb.gov, and your state attorney general
Also file with:
- • FTC Consumer Sentinel — reportfraud.ftc.gov (nationwide database)
- • Your state Attorney General — for local prosecution authority
- • FBI IC3 — ic3.gov if the scam originated online or overseas
Find your state's specific reporting resources on our state fraud pages.
Why This Scam Works
Scams exploit specific psychological pressure points. This one primarily uses:
- • Urgency and time pressure: Scammers demand fast decisions to prevent victims from calling family or thinking through inconsistencies.
- • Authority impersonation: Government agencies, banks, and health insurers carry inherent trust that scammers exploit.
- • Isolation: Instructions to "not tell anyone" keep victims from seeking help until it's too late.
- • Emotional hijacking: Fear (arrest, penalty, illness), hope (winnings, love), or guilt (helping family) short-circuit critical thinking.
Awareness is the strongest defense. Once you recognize the pattern, the same tactics feel much less convincing.
Common Questions — Reverse Mortgage Scam
Can I get my money back?
Depends on how you paid. Credit card charges can be disputed for up to 60 days. Bank transfers can occasionally be reversed within 24-48 hours. Wire transfers and gift cards are usually gone within hours. Cryptocurrency is essentially unrecoverable. Report fast — the first 24 hours matter most.
Will police actually investigate?
Most individual scam losses are too small for police investigation. Reporting still matters: aggregated reports let FTC and state AGs identify large criminal networks. Larger losses (over $10k) and scams involving named suspects are more likely to see actual investigation.
Am I likely to be targeted again?
Yes. Scammers sell "responsive" victim lists to other scammers. Expect follow-up contacts for months — often for supposed "refund services" or "help recovering your funds" that are just more scams. Freeze credit, change phone numbers if needed, and be extra skeptical of all unsolicited outreach going forward.
Should I feel embarrassed?
No. Modern scams are engineered by professionals who study behavioral psychology. Educated, experienced people fall victim regularly — it's not a sign of poor judgment. Talking about it openly is what protects future victims.
Are older adults specifically targeted?
Yes. FTC data shows adults 60+ report higher median individual losses than younger adults, even though they report fewer incidents overall. Scammers target seniors because they're more likely to have savings and less likely to be tech-savvy about verification.
Related Scams to Watch For
These scams share similar tactics or target similar victims: