Make Sure a Reverse Mortgage Is Right for You

Reverse mortgages, which enable seniors to borrow money against their homes that won't get repaid until after they move out or die, can be useful tools.

But they aren't foolproof. These increasingly popular loans are also the subject of many consumer complaints.

Los Angeles resident Stephanie Hodal is a case in point. She was disgusted with a telemarketer who called her parents' house on a Sunday morning in early 2006. Hodal happened to be around to answer the phone.

In a friendly, patronizing and polite tone of voice, the telemarketer said she came from a government sponsored program called CFI that would enable seniors to turn the value in their properties into cash.

The telemarketer asked about the weather and how Hodal was feeling, as though she were an old friend calling instead of a salesperson. She said Hodal's parents had responded to a solicitation and made a request for further information about the reverse mortgage program, although Hodal isn't aware of them having done so.

When Hodal asked the telemarketer for detail about CFI, she got evasive answers.

Even after asking them to stop, she continued receiving many more calls from such telemarketers for months afterwards. Hodal finally filed a complaint that opened early this year to the Better Business Bureau, the Arlington, Va.-headquartered nonprofit.

"The heaviness of the spiel was just so suspect," Hodal says.

Luckily, her mother never fell for the pitch, but Hodal wondered about the susceptibility of other elderly people. "My objection was how they were marketing this in such a manipulative way."

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