How to Find a Reverse Mortgage Lawyer


Reverse mortgages allow eligible homeowners to borrow against their equity for income. These financial products are designed specifically for seniors who may need to supplement Social Security benefits, 401(k) withdrawals, or a pension in retirement. While it’s not a requirement to have a reverse mortgage lawyer to guide you through the process, there are some situations where may it be helpful to consult one.

Key Takeaways

  • Reverse mortgages offer a way for eligible homeowners to turn their home equity into income.
  • Reverse mortgage lawyers specialize in reverse mortgages and the various laws that apply to them.
  • It may be necessary to hire a reverse mortgage attorney if you suspect a reverse mortgage company is engaging in abusive practices.
  • Heirs may need to engage a reverse mortgage lawyer if they’re unsure of their rights and obligations following the death of a reverse mortgage borrower.

Reverse Mortgages Explained

A reverse mortgage is a financial arrangement that allows eligible homeowners to withdraw their equity either in a lump sum, installment payments, or a combination of both. Unlike home equity loans and home equity lines of credit (HELOCs), the homeowner is not obligated to make monthly payments back to the lender. Instead, the reverse mortgage principal, along with accrued fees and interest, becomes payable if the borrower:

  • Moves out of the home but retains ownership of it
  • Sells the home
  • Passes away

A home equity conversion mortgage (HECM) is a reverse mortgage that’s backed by the federal government. These reverse mortgage products have specific guidelines for eligibility that must be met. To get a HECM, you must:

  • Be 62 or older
  • Live in the home and use it as a principal residence
  • Have paid off all (or most) of the mortgage
  • Not be delinquent on federal debt
  • Have sufficient financial assets and resources to pay for homeowners’ insurance, property taxes, homeowners association (HOA) fees, maintenance, upkeep, and repairs
  • Attend HUD-approved reverse mortgage counseling

Married couples can get a HECM together if both are at least 62 and meet other qualification criteria. If one spouse is under age 62, they can be listed on the reverse mortgage documents as an eligible or ineligible non-borrowing spouse. This status determines whether they can continue to defer payment on the reverse mortgage balance if the borrowing spouse moves out or passes away.

Important

You cannot add a spouse or other family member to a reverse mortgage once it’s been taken out.

What Does a Reverse Mortgage Lawyer Do?

A reverse mortgage lawyer is an attorney who specializes in reverse mortgage law. In terms of what they do, reverse mortgage attorneys can:

Generally, reverse mortgage attorneys should be up to date on federal regulations regarding reverse mortgages, including HECMs. They should also be knowledgeable regarding state laws and guidelines for reverse mortgages and reverse mortgage companies.

Note

Some attorneys may handle cases involving all types of reverse mortgages while others may specialize in home equity conversion mortgages.

When Would I Need a Reverse Mortgage Lawyer?

Homeowners who are taking out a reverse mortgage are not required to work with an attorney as they go through the application process. However, it could be beneficial to hire a reverse mortgage lawyer if you’re concerned about the lender using unfair or unethical practices that could constitute financial elder abuse.

For example, a reverse mortgage company might be committing financial elder abuse if:

  • A reverse mortgage is offered to a homeowner with the intent to defraud them
  • Undue influence is used to encourage a homeowner to sign over assets or property
  • Reverse mortgage products are promoted using false advertising
  • Homeowners are encouraged to use reverse mortgage proceeds to buy an annuity

There are other red flags that could suggest a reverse mortgage company isn’t legitimate. For example, attending reverse mortgage counseling is a requirement for a home equity conversion mortgage. If a reverse mortgage company is telling you that you can skip out on counseling and still get approved, that’s a big red flag. The same may be true if the reverse mortgage company is insistent that you use their recommended counselor since they could be collecting a kickback for referrals.

If you believe you’ve been defrauded by a reverse mortgage company or that the company acted negligently in granting your reverse mortgage, a reverse mortgage lawyer could help you to file a claim for damages. Heirs can also work with a reverse mortgage attorney to file claims if they believe a parent or other relative has been taken advantage of by a reverse mortgage company. This can happen in cases where a senior has a physical or mental impairment and a reverse mortgage company manipulates their disability to persuade them to borrow money.

How to Find a Reverse Mortgage Lawyer

Finding a reputable reverse mortgage attorney can be as simple as conducting an online search. You can start by looking for reverse mortgage lawyers in your local area, then expanding your search outward. Friends and family may be able to provide recommendations for trusted reverse mortgage attorneys near you.

When meeting with a reverse mortgage lawyer for the first time, it’s helpful to know what questions to ask. The questions you pose can depend on why you’re meeting with a reverse mortgage attorney. For example, if you’re considering getting a reverse mortgage, you might ask about how they work and what financial implications they might have for you and your spouse if you’re married.

If you believe that you or a loved one has been defrauded by a reverse mortgage company, you’ll also want to prepare as much information beforehand, including:

  • Name and location of the reverse mortgage company
  • Details of the reverse mortgage transaction
  • Details of the suspected fraud
  • Documentation or other proof of fraudulent activity

The reverse mortgage lawyer may also ask you questions to help get a better sense of whether grounds for a case exist. At some point during the meeting, you’ll also want to ask about their fees and how they’re paid for their services.

Do You Need an Attorney to Get a Reverse Mortgage?

Generally, there’s no rule that says you need to have an attorney to get a reverse mortgage. But it can be helpful to talk to an experienced reverse mortgage lawyer to make sure you understand how a reverse mortgage works and what financial responsibilities it entails for you.

Can You Fight a Reverse Mortgage?

It may be possible to file a civil claim against a reverse mortgage company if you believe they’ve engaged in fraudulent practices. Heirs who are left with a reverse mortgage balance following the death of the primary borrower generally cannot dispute the amount owed unless they believe that the reverse mortgage company committed fraud or financial elder abuse.

How Do You Get Out of a Reverse Mortgage?

If a reverse mortgage is legal and valid, the best way to get out of it is to pay off the principal balance, along with any interest and fees that have accrued. This payment can be made using cash assets but lacking those, it may be necessary to sell the home to pay off the balance.

The Bottom Line

Reverse mortgages can be complicated financial products, and it can help to have the guidance of an attorney when deciding whether to apply for one. A reverse mortgage lawyer can also be helpful in addressing instances of suspected fraud or financial elder abuse and obtaining damages, if applicable. Taking time to compare reverse mortgage attorneys online, including evaluating their fees, services, and reputation, can help you find the right lawyer to work with.



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