Reverse Mortgage Pros and Cons

Louis Gendason, a resident of Delray Beach, FL was sentenced this past Friday to serve more than 70 months in prison, court ordered to pay back more than $2 million dollars in restitution, and scheduled for 5 years of supervision after his release. Gendason, a loan officer, masterminded a very complex reverse mortgage scam which involved scamming many elderly folks out of their homes and equity, along with reverse mortgage lenders. He was able to construct this scam by luring uninformed and financially distressed elderly folks into applying for these loans, create ficticious equity in the homes by creating fraudulent appraisals, with his end goal being to steal all of the “false” equity that was in the home not only from the seniors, but from the lending company who offered the mortgage.

Gendason worked with two accomplices who helped him lure in unsuspecting seniors as well as provide fraudulent documentation pertaining to titles, loans, and appraisals. The two accomplices, Kimberly Mackey, 47, of Pittsburgh, and Marcos Echevarria, 29, of Palm Beach, received prison sentences of five years and two years, respectively, on Nov. 3.

It’s people like Gendason that give reverse mortgages a bad name. Because of this crime he committed, many seniors will come to terms that a reverse mortgage is nothing more than a scam. While there will always be people like Gendason who will orchestrate grandiose schemes in order to profit from their crimes, a reverse mortgage can be a lifesaver for many senior citizens who are in a financial struggle and have nowhere else to turn.

If you are considering a reverse mortgage, then make sure you are dealing with a licensed professional that has solid ties to the reverse mortgage industry. Nothing is ever foolproof, but the more you know about reverse mortgages, and who you are dealing with, then the chances of you falling into a reverse mortgage scam are minimal.

I personally hate to see senior citizens getting scammed. People unfortunately take advantage of the older population because they are sometimes easy targets. Always check to make sure that the company you are deciding on using for your reverse mortgage needs is a licensed reverse mortgage lender.