Seniors considering reverse mortgages as a foreclosure lifeboat will endure a longer process as they shop around for different rates. And, they face the uncertainty of finding out days before closing that the margin has changed and they will be receiving less than they expected.
Industry insiders fear that the margin increases will lead to higher instances of fraud, with lenders quoting a low margin to get clients interested, then disclosing a margin increase later in the process in a “bait-and-switch” strategy.
