Miami Condo Reverse Mortage Fraud Schemes
Miami Condo and home reverse mortgages are one of the recent targets of fraud schemes in the Florida real estate arena. Reverse mortgages, whether on a Miami Condo or home anywhere in Florida or the United States, by definition allow senior property owners (defined as age 62 years or older) to borrow against the equity in their homes without the hassle of having to secure a normal equity line of credit. In particular, as part of the Housing and Economic Recovery Act of 2008, senior homeowners are now able to use a reverse mortgage to purchase a primary residence. Unfortunately less than reputable sellers and developers are using the new rules to sell low quality properties, often with inflated values, to seniors who may not be fully aware of the estate planning issues and the complete cost of ownership of the properties, including furnishings, taxes, utilities, condominium fees, special assessments, and other unfamiliar fees. Additionally, to avoid the down payment requirements, some sellers contract with the senior buyers to “give” or otherwise deed them the properties first, with the subsequent requirement of completing reverse mortgages to pay for the “gifts.”
Many Florida reverse mortgage companies will focus on their job of getting the reverse mortgage application properly completed and approved for the Miami condo or other property, rather than the underlying property quality, estate planning issues, or individual ramifications of the decision. Reverse mortgages are more complicated than standard mortgages, and have many different and generally substantially higher fees. As a result, borrowers, and where appropriate, their families, should always consult BOTH a Board Certified Real Estate attorney AND a Certified Public Accountant before signing the paperwork. This will cover both the legal and estate planning issues involved.