ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Lawsuit Accuses Reverse Mortgage Lenders of Fraud

Updated on June 4, 2016

Suit Seeks to Protect Reverse Mortgage Borrowers

A new class action lawsuit accuses two mortgage companies of defrauding hundreds of elderly Washington area residents who obtained reverse mortgages.

The lawsuit asks for $5 million to compensate residents who were charged for unnecessary home inspections that were added to their loan debt.

Reverse mortgages allow elderly homeowners to benefit from their home equity. The owners turn over their loans to mortgage companies, which then allow the residents to live in the houses free of charge. When the residents die, move out or sell the homes, the loan and interest are paid to the mortgage company with any remainder going to the estate.

However, the mortgage companies reserve a right to verify the owners who default on their taxes still live in the homes at a cost of $15 to $20 per inspection. The inspection costs are added to the loan amount.

The inspections are supposed to be limited by law to no more than one per month.

The class action lawsuit says Champion Mortgage Co. and one of its affiliates used automated software to prompt inspections several times per week and sometimes more than once per day. The lawsuit calls the inspections repeated, unreasonable and unnecessary.

Hundreds of Washington area residents were charged for the repeated inspections.

The lawsuit was filed in U.S. District Court for the District of Columbia by the law firm of Tyco & Zavareei, the National Consumer Law Center and AARP’s Legal Counsel for the Elderly.

Two elderly D.C. residents are named as plaintiffs. Their attorneys say the mortgage companies were trying to skim money from them.

The National Reverse Mortgage Lenders Association says the inspections are required for residents in default to ensure the property is being properly maintained.

Some lawyers warn that reverse mortgages should be a last resort for elderly residents who do not want to lose their homes because of the risk they will lose their equity. Recent rule changes have sought to build in more consumer protections, such as limiting interest rate increases and ensuring borrowers can pay their taxes, insurance and upkeep.

Reverse Mortgage Borrowers Allege Fraud

Elderly homeowners say they were overcharged for unnecessary inspections by reverse mortgage lenders.
Elderly homeowners say they were overcharged for unnecessary inspections by reverse mortgage lenders.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)