DENVER (KDVR) — A Denver woman says her 89-year-old mother lost her life savings after signing a reverse mortgage agreement. Patricia Rivers tells the FOX31 Problem Solvers the home was valued at $429,000 dollars.
“My mom’s life savings, gone, everything she’s worked for,” she said. A GoFundMe has been set up for her mother.
The Colorado Attorney General’s office warns reverse mortgages can be a good choice for some, but lenders should be carefully checked out.
The Attorney General’s office defines a reverse mortgage as a contract agreement that takes part of the equity of a home and converts it into payments to the owner. The money the homeowner receives is usually tax-free and generally won’t affect social security or medicare benefits.
The Problem Solvers asked certified reverse mortgage expert Bruce Simmons about the best candidates for a reverse mortgage. His company, American Liberty Mortgage maintains an A+ rating with the Better Business Bureau and has offices in Colorado, Arizona and Florida.
Simmons says in Colorado FHA insured loans are the most common, designed for those over the age of 62.
“As long as they live in the home, pay their taxes and insurance and keep their name on the title they never have to pay on the loan as long as they live,” he said.
Simmons warns against unsolicited calls from high pressure sales people.
“You should be reaching out to the people you want quotes from, you should get at least three, and don’t let anyone pressure you into anything,” he said.
Simmons adds that homeowners should ask for proof of a CRMP certification. A lender should also be a member of the National Reverse Mortgage and Lenders Association.
The state attorney general’s office warns reverse mortgages involve fees and interest. Homeowners still have to pay property taxes.
Any suspicious offers should be reported to the Attorney General’s office here.