December 2, 2021

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Borrower Beware: FHA Warns of Reverse Mortgage Scams

We’ve warned readers in previous blog posts about mortgage scams and third-party companies that try to charge consumers for services they can get for free. The FHA official site has plenty of warnings in its pages about being an informed borrower, advising FHA loan applicants to contact the FHA directly if they have questions about fees they should or shouldn’t be paying. One of those warnings is found on the FHA Reverse Mortgages for Seniors page, which advises,

“If you are interested in a reverse mortgage, beware of scam artists that charge thousands of dollars for information that is free from HUD…”

The FHA Reverse Mortgage program can be a popular target for scammers because it’s easy to assume older borrowers are out of touch with recent developments in technology, changes to the FHA loan program or the regulations that govern it.

In an age where more seniors than ever are online, and thanks to consumer resources like this is definitely not true in many cases, but experienced scam artists can put together convincing-sounding presentations designed to fool even web-savvy consumers.

One way scammers fool borrowers into paying for information that is available free of charge is by simply getting to the consumer first. A borrower who isn’t aware they don’t need t pay for the information a scammer offers for a fee may be fooled by the marketing hype. A quick phone call to your local HUD Homeownership Center can clear up any confusion over whether a borrower should be paying for a particular “service” such as referrals to an FHA lender offered individually or as part of estate planning.

The best way to avoid being scammed by a third-party company offering to perform a service the FHA offers Reverse Mortgage borrowers for free is to ignore e-mails and phone calls you didn’t initiate when the caller or e-mailer offers their “help”. Anyone who calls you offering a service can be easily checked out–take the caller’s name and phone number along with a description of the service offered.

Then contact the FHA to ask if such a for-pay service is necessary or if the FHA offers it for free. You can also use this tactic in cases where you did initiate contact but aren’t sure if you should be paying for an FHA-related service or product.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

February 15, 2011

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

5850 San Felipe Suite #500, Houston, TX 77057 281-398-6111. is privately funded and is not a government agency.

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