Blog , Lifestyle and Entertainment

Anatomy of a Scam: Homeowner

Posted on Friday, July 21, 2023
by Outside Contributor

By: Travelers


For a large number of older Americans, their home is their most valuable asset. Many may have worked for decades to pay off their mortgages and own their homes free and clear. Unfortunately, this can make them a target for home improvement fraud and mortgage scams. If you or an elderly loved one owns a home outright, knowing how to spot these scams before they happen is essential.

How Homeowner Scams Work

Many factors make seniors more of a target for home-related scams. Older people may need special accommodations in their house to be able to physically move around. However, only about 10% of U.S. homes have these accommodations.

As the baby boomer generation ages, they may need work done to install these home features that can let them stay in their homes.

Financial issues also play a role in seniors falling for these scams, especially with reverse mortgages. A reverse mortgage is a home loan that allows you to borrow against your home’s equity. In times of economic difficulties, more seniors may look toward reverse mortgages to help supplement their retirement income.

For all of these reasons and more, two commonly reported homeowner scams are related to home improvements and reverse mortgages. Here’s how they work:

Home improvement scams. Fraudsters pretend to be friendly contractors. They’ll point out various problem areas around the home that need repairs immediately (true or not). Then, they ask victims to pay inflated prices for services, take a deposit and run, or only complete some of the work and ask for more money.

Mortgage scams. Fraudsters may call their victim and mislead them into purchasing a reverse mortgage and keep the closing costs for themselves. A scammer could also try to get an elder to sign paperwork that transfers the victim’s house deed to the scammer. Additionally, they may steal the senior’s personal information and/or convince them to sign for and give them access to a second mortgage on the senior’s house.


A Common Example of a Homeowner Scam

The following scenario can help you better understand how these types of Elder Fraud could play out in real life. While this victim is fictional, their story represents what can happen.

Myles Jones is a proud homeowner. He’s lived in the same home for nearly 50 years, raising four kids with his wife, Denise. Myles and Denise have paid off their home, but money has been tight with their fixed income over the last few years. Denise has struggled with health and mobility issues, and getting around their home has become challenging.

One day, Myles received an unsolicited call from someone claiming to be a mortgage broker. He said Myles and Denise qualified for a great deal on a reverse mortgage. It would let them stay in their home, add cash to their savings, and they could use the money on home updates for Denise. Myles had seen ads for reverse mortgages on TV. He knew they existed but didn’t quite understand the ins and outs. After all, the last time he worried about his mortgage was decades ago.

The broker was persistent, claiming the reverse mortgage would solve many of Myles’s problems. So, Myles gave the broker his personal information to get the process started. After a week, Myles hadn’t heard back, and the number didn’t work when he called.

Months later, Myles learned the scammer had taken his personal information and ran up a large amount of debt in his name.


Ways to Help Avoid Homeowner Scams

Unfortunately, it’s all too easy for fraudsters to search publicly available databases of homeowners to call people like Myles to offer reverse mortgages. They may also go door-to-door in a nice neighborhood or call homeowners and claim they can help with repairs.

The good news is, there are some potential warning signs to these scams that make it possible to spot them early and protect yourself. To help avoid getting scammed:

Don’t provide personal information to anyone over the phone. Fraudsters may call from an unrecognizable number. Then they’ll convince their victims to provide personal information such as Social Security, bank account, or credit card numbers over the phone.

Hang up if you’re unsure. If you don’t know who’s calling, hang up and look online for more information about the person or company.

Don’t work with unlicensed contractors. If a friendly contractor pops up in your neighborhood, get their business information and check the Better Business Bureau for complaints.

Ask around. Speak to your neighbors and see if they’ve been called or approached by scammers. And if you need home improvements, ask if they can recommend a reliable contractor.

Know the facts about reverse mortgages. The Consumer Financial Protection Bureau has a good overview of reverse mortgages and what is and isn’t allowed.

Get more than one quote. If a reverse loan is something you’re considering, shop around. If any lender says you should only talk to them, this is a red flag.


Help Safeguard Your Future

Scams like these can cause homeowners to lose large sums of money, which could be devastating if you’re living off your retirement nest egg. That’s why it’s essential to recognize the signs of homeowner fraud, know when not to take the bait, and help safeguard your future.

This content is brought to you by Travelers. AMAC members receive special discounts on auto, home, and renters insurance from Travelers.

Check out this special offer for AMAC members from Travelers or call 866-675-9167 to discover how much you can save.


*Average savings is based on new AMAC auto policyholders countrywide who reported savings to Travelers through the Affinity marketing distribution channel in 2021. Individual savings may vary. Savings are not guaranteed.

Share this article:
Notify of
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
10 months ago

I simply cannot understand how anyone can be so gullible as to fall for any of that nonsense.

10 months ago

I thank the Lord I was raised by a Missourian!

Candace Gonzalez
Candace Gonzalez
10 months ago

Miles was an idiot!

10 months ago

Dear Travelers and the world; These scammers are pond scum. Once they get hold of a pond “you” they will not give up until they take over. I have so many life experiences I would share but time does not allow me to do it. Let me just say that I have worked in health care overseas and in this country and am trying to finish a book about my husband and our life together 49 years we have been married. I also plan to include our lives before we met. He was born in Berlin in 1938 and has lived under tyrants until he came out of east Berlin at the age of 18 when most of his family decided to get out. I would not consider us gullible in any sense of the word but I know what “Billy Boy” is saying as I have so tried to warn others since I returned from working in health care in the soviet union and the middle east! I would finish with a question. How could people be so gullible over the last 40+ years and allow this country to fall into such disarray?
Thank you, Carol

Join or Renew Today!

Money-Saving Benefits News, Podcasts, & Magazine A Strong Voice on Capitol Hill
All Membership Packages Include Your Spouse for FREE!



Fast & Easy !



You save $6



Save 25%



1 Payment

You can also print and mail your membership application. Download the application
Understanding Universal Life Insurance
Are Vitamins Good for Me

Stay informed! Subscribe to our Daily Newsletter.

"*" indicates required fields

Would love your thoughts, please comment.x

Subscribe to AMAC Daily News and Games