Pahrump Valley Gazette, Thursday, April 1-7, 1997 23
Bryan, D'Amato introduce bill to prevent reverse
mortgage rip-offs of senior citizens.
WASHINGTON, D.C.--Following up on his warning last
week to senior citizens in Nevada not to fall for reverse
mortgage rip-offs, United States Senator Richard Bryan (D-
Nevada) and Banking Committee Chairman Alfonse D'Amota
(R-New York) today introduced legislation to protect senior
citizens from these scams.
"Reverse mortgages provide financial relief for senior
citizens who find themselves house rich, but cash poor,"
Bryan said. "Unfortunately, many seniors have lost thou-
sands of dollars to so-called 'estate planners' who target
seniors who need extra cash to expense major health care
costs or meet basic living needs. Some even go door-to-door
offering their services without fully revealing their costs.
When the senior goes to close on the loan, that's when they
Jcover the outrageous fees charged by these estate planners.
Some seniors often don't discover the fees until they start
receiving their money and notice they have been short-
changed."
The bill, the Senior Citizen Home Equity Protection Act,
will require those issuing the mortgage to disclose all costs
related to estate planning, financial advice or related services.
It also clarifies that the Department of Housing and Urban
Development (HUD) has the authority to impose restrictions
to ensure that those seeking reverse mortgages do not pay
excessive costs for obtaining the mortgage, including any
costs related to estate planning.
Homeowner, 62 years and older are eligible to apply for
reverse mortgages and can borrow up to a maximum of
$160,950. No repayment of the loan is made while the
borrower resides in the home.
"Because reverse mort-
gages are becoming more
popular, scare artists are com-
ing out of the woodwork seek-
ing to tap into this new mar-
ket," Bryan said. "We must
take quick action to put a stop
to this and protect senior citi-
zens who are targeted by these
scams."
Estate planning services have been known to charge about
6-10 percent of the loan amount for nothing more than putting
the borrower in touch with a lender. This amounts to $6,000-
$10,000 for a $100,000 loan which the service deducts as a
lump sum from the loan. The same information is available
from HUD for free.
At news conferences in
Reno and Las Vegas last
week, Bryan, a member of
the Senate Banking Commit-
tee, warned senior citizens
not to fall for these rip-offs
and urge them to make a call
to HUD first. He also said
legislation is needed to fully
ensure that seniors receive
all the information they need
related to the costs of getting
a reverse mortgage.
"This legislation will
mean the scam artists will no
longer be able to hide their
fees, "Bryan said. "Full dis-
closure of the costs and the
ability of HUD to prevent
excessive fees are important
steps to take to protect senior
citizens seeking reverse mort-
gages."
New Deputy
to prosecute
telemarketing
fraud
LAS VEGAS--The office
of Attorney General Frankie
Sue Del Papa announced to-
day that Senior Deputy At-
torney General Richard C.
Linstrom has been named
director of the Telemarketing
and Consumer Fraud Unit.
Linstrom, 40, of the Attorney
General's Las Vegas Office,
was most recently a prosecu-
tor in the Workers' Compen-
sation Fraud Unit. He was
previously a Deputy Pros-
ecuting Attorney and in pri-
vate practice in Honolulu,
Hawaii. Linstrom has been
lead counsel in over fifty jury
trials.
Linstrom replaces Senior
Deputy Attorney General
"4argaret Stanish who has
,aken a position with the U.SI
Attorney's Office.
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