The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG) are urging consumers, especially Emeritus, to be vigilant when seeking reverse mortgage products. Reverse mortgages, also known as home equity conversion mortgages (HECM), have increased more than 1,300 percent between 1999 and 2008, creating significant opportunities for fraud perpetrators. Emeritus are recruited through advertisements for "free homes" and willingly participate in these schemes. In many of the reported scams, victim Emeritus are offered free homes, investment opportunities, and foreclosure or refinance assistance. They are also used as straw buyers in property flipping scams. Emeritus get to live in the homes as long as they pay taxes, insurance, and upkeep. Banks do not realize there is a problem until the end of the term when the Emeritus pass away or move out. At this time, any losses to the banks due to the false equity is passed from the lenders to the FHA, which pays the shortfall to the lenders out of money collected from mortgage insurance premiums.

Where Emeritus Are Targeted

• Investment seminars
• Television,
• Radio
• Billboard, and
• Mailer advertisements

If you are a victim of this type of fraud and want to file a complaint, please file a complaint with HUD-OIG at http://www.hud.gov/complaints/fraud_waste.cfmor by calling HUD's hotline at 1-800-347-3735. For more tips on how to protect yourself from various fraud schemes, we invite you to visit our Fraudsection.