Stealing Grandma’s Home: The Reverse Mortgage Scam

Trying to scam anyone obviously is a Terrible thing to do but to specifically Target senior citizens many of these People nearing the end of their lives uh Many of these people have a bunch of Medical issues many of these people Don't have a lot of money some of them Just trying to get by on social security So to specifically Target these people For a scam uh is a special kind of low Far worse in my opinion than scammers Targeting people who are not senior Citizens but that's just my opinion uh You can disagree with that if you want But specifically what we're going to be Talking about today is a company called American advisor group a celebrity known As Tom celic and the terrible product That in my opinion at best is a horrible Horrible product you should not be get Involved in and at worst an outright Scam known as a reverse Home Mortgage Now these products are specifically Designed to Target senior citizens and We're going to go over why I think they Are a horrible idea and there's there's Actually been quite a few people have Pointed out uh that this is a product Most senior citizens and I'm sure a Couple people it could potentially work Out for them but most senior citizens Should not be getting involved in a Reverse Home Mortgage now before we get Into the actual company let's talk

Briefly about Tom celic if you're under The age of 30 it's possible you don't Know who this guy is uh he's a famous Celebrity he's been famous pretty much Since the the 1980s uh 1980 the TV show Magnum PI launched him into stardom a Show that was on for like eight years Made him Super Famous and fun fact Tom Celic was actually going to be the Original Indiana Jones uh George Lucas And Spielberg wanted him to be Indiana Jones but he couldn't get out of his Magnum PI contract so that eventually Went to Harrison Ford he was also on the Friends show for a hot minute and over The past decade he's been the star of a TV show called Blue Bloods right and That show is very popular with seniors Now you're probably saying Scott why are You telling me the the entire celebrity History of Tom celic I really don't care We're getting to that it's part of the Whole bigger picture the point I'm Trying to point out is that this guy's Had an illustrous career and obviously He has a lot of money unless he spent The money on really stupid things but He's made a ton of money over the Decades and decades he's been he does Not need to be doing these ads so it's It's really quite Odd as to why he's Doing these reverse Home Mortgage ads They're clearly paying him a ton of Money to do this now again I want to

Point out the older you are as a person The more this guy is probably familiar To you and he's actually a very Well-liked a very beloved celebrity Among senior citizens my mom actually Has a huge crush on him so she's not Going to like this video at all but he's Very popular among senior citizens which Is why this company American advisor Group decided to make him their Celebrity their celebrity endorser of Their product reverse home mortgages He's been doing ads for their company For I believe about 8 years years at This point almost a decade uh promoting Reverse home mortgages and the thing is That over the past couple years people Have started to catch on uh that reverse Home mortgages are a little sketchy at Best they're a little sketchy um and They've started to call them out right There was actually H3 the H3 podcast Actually did a whole segment on the Reverse home mortgages in Tom celic a Couple years ago there have been Comedians that have been making jokes About this whole reverse home mortgages And there was actually a Family Guy Episode where the entire subplot was Tom Celic uh scamming Peter Griffin into a Reverse home mortgage and him trying to Get out of the deal they did an entire Episode where that was the subplot so Needless to say there's been a lot of

People that have been calling out Reverse home mortgages over the past Couple years and it started to get to The company the American advisor group They run ads and I want to show you some Of them and they've started to put in Their own ads guys guys you got to trust Us we're not a scam we're just here to Help you out this isn't my first Rodeo and let me tell you something I Wouldn't be here if I thought reverse Mortgages took advantage of any American Senior or worse that it was some way to Take your home a reverse mortgage loan Isn't some kind of trick to take your Home it's alone like any other it's Never a good sign when the company has To put in their own ad at the beginning Of the ad guys we're not a scam trust us All the stuff you've been hearing about Us trying to rip senior citizens off and Trying to take their home away from them No no no that is not true we're a Legitimate Product Trust us I really Don't know why Tom celic would continue To be the sponsor for them other than The fact that they're probably paying Him an obscene amount of money to do This right and this isn't the only ad They have multiple ads where he points Out time and time again this isn't a Trick we're not trying to take your home We're legitimate trust us just like you I thought that reverse mortgages had to

Have some kind of catch just to way for The banks to get your house right it's Not any of that it's not another way for The bank to get your house and it's also Not too good to be true okay so at this Point it's clear that the company is Trying to run damage control uh their Image the image of reverse home Mortgages has been tarnished uh over the Past couple years so they're trying to Run damage guys we're not a scam they do This they do this in all their ads now It actually gets worse because they have An official YouTube channel I have it Pulled up over here and they have Uploaded all of their Tom celic ads to Their YouTube channel and I actually Have the plug on that restores uh Dislikes to the YouTube page and you can See on all of their their YouTube uh Videos with Tom celic and reverse home Mortgages all of them have more uh down Votes than up votes on their page people Do not like them and they've actually Turned off all of the comments for all Of these ads because obviously it would Be filled with people complaining that Reverse home mortgages are scams and They don't want that right and it's Never a good sign when a YouTube channel Has to turn off the comments for their Own video that's that's you know that Should be a sign right there that alone That uh guys something a little fishy is

Going on here now at this point you're Thinking Scott all right these reverse Home mortgages they sound pretty sketchy But I need to know some more information That's good you should definitely ask For more information now before we talk About reverse home mortgages let's Briefly go over what a traditional Normal mortgage actually is it's going To vary based on you know country region All that stuff but generally you're Going to have a 30-year mortgage that You buy on a house let's say you want to Buy a home it's $500,000 you'll have to Put some money down but then you'll get A loan or a mortgage uh from the bank For the rest of the purchase price of The actual home let's say you get a $400,000 mortgage and there will be an Interest rate on that mortgage and You'll be paying that off over 30 years Right and that interest rate a few years Ago was quite low 2 to 3% I think over The past couple years it's gone up I Think it's like six s% right now but Whatever it is that interest rate you're Paying off the loan over 30 years that's Going to add up it's going to add up to 50 100 depending on the size of the loan You take it's going to add up to a lot Of money on top of the actual loan that You have to pay back to the bank right So that is how Banks traditionally get Their money from a traditional mortgage

Mortgages have been around for a long Time that's a traditional mortgage some People can be like oh I don't like Mortgages that's fine but that's a Traditional mortgage a reverse mortgage What these companies are offering uh is Quite a bit different so a reverse Home Mortgage I'll actually pull this up on The screen from Investopedia uh you have To be 62 years or older to get a reverse Mortgage so again this specifically Targets only senior citizens if you're Under 62 you can't get a reverse Home Mortgage so I actually found on this Website that explains the pitfalls of Reverse Home Mortgage better than I did So we're going to go over this page and I'll give my opinions on it as well so 10 potential pitfalls and complexities Of reverse mortgages interest and fees Accumulation the interest on reverse Mortgages is typically higher than a Standard mortgage and accumulates over Time increasing the total loan balance As no monthly payments are made so like I said uh you don't actually like they Said you don't actually make payments While you get your reverse Home Mortgage But the interest builds up on the money That the bank actually or this company Actually gave you so over time your House is basically becoming a Depreciating asset to you and the the Company actually owns more of your home

Over time and you owe less and less of It so that's a very bad thing next up we Have complex loan terms reverse Mortgages have complex terms and Conditions that can be difficult for Some borrowers to understand fully there Can be unexpected Clauses related to Loan repayment conditions or Restrictions on what the property can be Used for for and they use this Complexity to trick a lot of elderly People into signing up for these reverse Home mortgages and then many of these People which I'll show you later there's Actually a comment on this own page many Of these people feel like they were Tricked getting into these programs next Up we have effect on government benefits Receiving funds from a reverse mortgage May impact eligib eligibility for Certain government benefits such as Medicaid or supplement security income Borrowers need to carefully consider how Reverse mortgage may affect their Current or future benefits so if you're Getting more money this is basically Payments to you for your home uh Basically you could get less money from Medicaid from the government because now You're you're technically making more Money even though it's not a job or Anything but you're making money so that Can affect how much money you'll Actually get from the government if

You're a senior citizen living off of Benefits loan repayment pressure when The borrower dies moves out or sells the Home the the loan becomes due heirs are Then faced with a decision to either Sell the home to repay the loan or Refinance it into a traditional mortgage If they wish to keep the home so this is The big seller this is the big issue Right here uh that a lot of people have A problem with is that many people want To leave their homes to their kids That's their inheritance that they're Going to leave them and if you get a Reverse home mortgage and you have it For years the interest is going to build Up on it to the point where eventually Uh you may have virtually no equity in Your home at that point if the house Gets sold after you die your kids aren't Going to get anything there's going to Be like no inherent no inheritance left At all to them if the interest builds up On this reverse home mortgage and like I Said before with all these complex terms Many senior citizens don't realize that When they're first signing up for these Programs decreased home equity as Borrowers receive payments the equity in Their home decreases which means there Will be less to leave to erors that's What I just said while a non-recourse Clause prevents vents debt from Exceeding the home's value the home's

Equity may be completely depleted Leaving nothing for their heirs so Ohio State University I think it was I'll Pull up an image uh they they did a Report on this and they found that you Know over the time it can take any it Could take as little as five or six Years the actual interest that AC crws On these reverse home mortgages can Actually be to Total more than the Actual value of the house now there are Um there are regulations in in place so It can never go more than the value of The house that you would have to pay for A reverse Home Mortgage but it can equal The total amount meaning you virtually Have no equity in the home at all at That point the company completely owns Your home moving or selling restrictions If the borrower decides to move or sell The home the reverse mortgage must be Repaid at that time this could limit the Borrower flexibility in changing living Arrangements in back on hairs heirs may Not be adequately informed about the Reverse mortgage and can be caught off Guard by the financial implic ations After the borrower's death they need to Be prepared to address the loan Repayment to avoid Foreclosures as I talked about earlier That's going to be the number one issue That people have most people especially People who have older senior citizen

Parents that sign one of these they Don't know that their inheritance is is Basically getting flushed down the Toilet at that point insurance and Maintenance requirements borrowers must Maintain their homes and pay homeowners Insurance and property taxes failure to Do so can result in the loan being Called due with which might lead to Foreclosure this is another big issue Where they all of this is written in the Fine print but most people don't see it Is that you need to continue to maintain Your property even if many of these Seniors like I said they're some of them Are bedridden some of them need constant Medical care but they also need to Maintain their property and if they Don't do that if the the home they live In becomes rund down uh the company can Actually foreclose on them they can kick Them out of their property and take the Property from them and that does happen A lot of people get completely screwed Over because they're not able to Properly maintain their home and the Company's like well I guess it's our Property now then get out of here Rising Debt falling Equity if the housing Market experiences a downturn the home May not appreciate as expected Potentially leading to a situation where The loan balance surpasses the home's Value Financial scams and unscrupulous

Lenders some lenders or third parties May take advantage of the complexity of Reverse mortgages to deceive older Adults it is vital to work with a Reputable lender which is HUD approved Now this website I'm looking at right Here believe it or not this website is Designed to get people to sign up for Reverse home mortgages on their own Website they have to show you all of the Disadvantages of a reverse home mortgage On a on a company's website where They're trying to get you to sign up for A reverse mortgage they're like oh yeah By the way there's like a long list of Things you should be really really Careful with now if you actually scroll Down on this page uh the very first Comment that someone left is someone who Got screwed over by one of these so K Left a comment October 20 October 31st 2023 my mom got an HM HCM which is a Reverse Home Mortgage uh in 2012 she Used 60,000 total of 60,000 out of 130,000 she was told she had Equity to Use the fees and interest were taken From her line of equity we knew that Fees and interest would acrew we thought That would be tabulated at the end of The loan as part of the payoff we did Not know they would pay themselves those Fees and interests out of her credit Line we were never told that the fees And interest would sap her equity line

Her 130,000 that we were told would grow Was untrue her equity line dried up in Two years because of fees and interest This is a scam I can't afford the now 280,000 and growing payoff I have to Sell or lose it to for closer this whole Thing is a lie so K was the child of an Individual of a senior citizen who took One of these loans and now they feel Completely screwed this was their Inheritance that their parents were Going to leave to them but the interest Payments over time massively accured and Now there's basically no equity in her Home that's going to be left to K once Her parent if they if they passed away Or once they're going to pass away Shortly there's going to be no interest For there's going to be no equity in the Home for K to have and the actual Company gets everything at that point Now this is a very good deal for these Companies AAG and the other companies That do reverse home mortgages because Effectively what they are doing is they Are paying half off for homes right and Homes generally they go up in value Outside of recessions like 2008 but Generally a home is going to go up in Value and they never give you the full Amount of your home right so if you Could if you could spend half the value Of a home if you wanted a $500,000 home And you only had to pay

$250,000 for it that is an amazing deal Now you and me can't do that we can't do That but these companies that are Offering reverse home mortgages to Senior citizens that's exactly what They're doing now maybe in certain Situations a reverse Home Mortgage could Work for some people specifically if you Were a senior who you don't have any Children you don't have any relatives You want to leave your property to after You pass away and maybe you're really Bad Health um you need a bunch of money To pay for your medical bills maybe in That scenario a reverse Home Mortgage Could work for that specific person but For the majority of seniors the majority Of people who are getting these they do Want to pass their house on as their Inheritance to other people and they Don't realize that getting these reverse Home mortgages the interest rate is Eating away at your your value in the Actual home and eventually uh over years You you you're not the owner of the home Anymore when you when you pass away or If you want to move or if you want to Sell it the actual company in this case AAG or one of these other reverse home Mortgage companies they're actually they Own the majority stake in the home or in Many cases they own the full value of The home after all the interest has Added up over time now why they may

Technically not be an outright scam These actually are regulated by the Government um in my opinion and in many Other people's opinions uh this is a Terrible terrible investment that people Should senior citizens should avoid Right people seniors don't realize this Is this is screwing them over now I'm Going to leave you at the end of this Clip of Dave Ramsey talking about why he Hates reverse home mortgages uh and I'll Actually have a link below to the Family Guy skit that they did on on the reverse Home Mortgage scam as well so take a Look at that listen here's the terms of Reverse mortgage in case you didn't know Borrowers can receive 50% to 66% of the Value of their Equity depending on their Age and interest rate and the interest Rate generally set about 5% now why do I tell you not to get Reverse mortgages because you're going To lose your home potentially because You get into all kinds of problems and Because the interest rates and the fees Are a really bad ripoff interest rates Are generally set about 5% do you know What the going rate on a year fixed is Today 3 and an eighth so you're paying Almost double you old people that are Getting ripped off thank you Tom celic And Henry Winkler we appreciate your Endorsement get the opportunity to pay Double and potentially lose your house

When you're 92 this is a dadgum mess people

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