Reviewed by Dan Frio, NMLS #246527, 38 years in mortgages · October 15, 2026
A real FHA reverse mortgage has strong protections. Sadly, scammers know that older homeowners have equity, and some try to take advantage.
Knowing the warning signs is the best way to protect yourself and your family.
Every FHA reverse mortgage requires you to meet with an independent HUD-approved counselor before you apply. The counselor does not work for the lender. Use this meeting to ask anything that worries you. If someone tells you to skip counseling, walk away.
On most reverse mortgage refinances of your home, you have the right to cancel within 3 business days after closing. If you change your mind, you can back out.
Never sign a page that has blank spaces. Never sign something you have not read. Ask for copies of everything. If someone says "we will fill that in later," stop.
Bring a son, daughter, friend, or other trusted person to your meetings. A second set of ears helps. Scammers often try to keep seniors alone. A real loan officer will welcome your family.
Trust your gut. Do not sign. Call someone you trust. You can also learn more from the Consumer Financial Protection Bureau, which has free guides on reverse mortgages.
Dan has written a longer article with more examples: How to Spot a Reverse Mortgage Scam.
A real loan officer will answer all of these gladly. You can look up any NMLS number for free at NMLS Consumer Access. If someone dodges these questions, that is your answer.
No. With a real reverse mortgage your name stays on the deed. Anyone asking you to sign over your deed is a red flag.
No. Being told to buy an annuity or insurance with your proceeds is a red flag. You decide how to use your money.
On most reverse mortgage refinances of your home, you have the right to cancel within 3 business days.
It protects you. An independent HUD-approved counselor explains the loan before you apply and does not work for the lender.
No. "Free house" or "government grant" pitches are red flags. A reverse mortgage is a loan.