Great Lakes Wire

LANSING – Attorney General Dana Nessel marked the conclusion of Financial Literacy Month by re-issuing a consumer alert on reverse mortgages, emphasizing the importance of understanding the risks and benefits associated with this financial option. Nessel highlighted that while reverse mortgages can offer financial relief, they also carry significant risks and obligations.

Nessel emphasized, "While reverse mortgages can provide financial relief for some, they also come with significant risks and obligations." She urged homeowners considering this type of loan to seek professional guidance and carefully evaluate their options before committing.

The Consumer Financial Protection Bureau (CFPB) outlines specific requirements for qualifying for a reverse mortgage, including age restrictions and property ownership criteria. Additionally, various alternatives to reverse mortgages, such as refinancing, downsizing, or seeking financial assistance programs, were presented as viable options for homeowners to consider.

It is crucial for individuals to familiarize themselves with the different types of reverse mortgages available, such as Home Equity Conversion Mortgages (HECMs), Single-Purpose Reverse Mortgages, and Proprietary Reverse Mortgages, to determine the most suitable choice for their financial situation.

Moreover, Nessel cautioned homeowners about potential scams targeting older individuals interested in reverse mortgages. She advised vigilance against coercion by family members or caregivers, identity theft, investment schemes, and unauthorized access to loan funds.

To safeguard against fraudulent activities, Nessel recommended consulting with financial counselors, verifying federal insurance coverage, understanding repayment terms, and confirming the legitimacy of mortgage payments. Homeowners were reminded of their right to cancel a reverse mortgage within three days of closing without penalty.

In conclusion, Nessel stressed the importance of understanding the risks involved in reverse mortgages to protect financial well-being and home equity. By staying informed and cautious, older homeowners can navigate the complexities of reverse mortgages responsibly and make informed decisions about their financial future.