Recently, the Massachusetts state Division of Banks ordered that five companies stop selling reverse mortgages to senior homeowners because the companies allegedly just weren\’t properly licensed to sell the mortgages in the state. In a financial plan already riddled with unfounded fear and uncertainty based on misconceptions, this recent scandal only serves to exacerbate the problems associated with reverse mortgages, which can actually be invaluable sources of income for elderly homeowners.

A reverse mortgage allows a lender to pay the homeowner certain amounts per month, collecting fees and interest, and the lender will be paid back when the homeowner sells the property or dies. For many seniors, it can mean that they own their houses for the rest of their lives rather than losing property and being forced into assisted living. Unfortunately, fraud could scare potential reverse mortgage users away from even considering the option if a broker presents it.

The main factor to continuing to provide the opportunity for seniors to consider the benefits of a reverse mortgage is education for all seniors, in the event that they are approached by a broker bearing the reverse mortgage offer. Brokers who have the best intentions will have a wealth of knowledge on the topic and will be able to answer any question that is brought up, even to the extent that they will admit the benefits of other financial planning options. Scott Tucker, a Chicago mortgage broker and loans officer, is one broker who recognized the potential in reverse mortgages back in 2009 and set to work building a thorough knowledge of the plans for himself. Now, as reverse mortgages are in the spotlight after recent economic legislation, Tucker is an authority on reverse mortgage plans. He hosts workshops to teach and inform people about reverse mortgages, whether they end up being his clients or not. The key is to get the word out there-especially to debunk common misconceptions-so that seniors can make educated decisions during financial planning.

Tucker also authored a book called \”Reverse Mortgages: what you need to know from Z to A,\” and he has made several radio appearances to discuss the topic. Success stories from his clients have mentioned that Tucker\’s education and ultimate reverse mortgage brokerage made them feel \”clear and confident\” moving toward the future.

The fraudulent brokers in Massachusetts were using the basic tenants of a reverse mortgage to promise people that they would have enough money to take lavish vacations and guaranteeing 100 percent that the reverse mortgage wouldn\’t result in foreclosure or eviction. A very knowledgeable broker will acknowledge the potential pitfalls of reverse mortgages, including the fact they aren\’t appropriate for everyone\’s situation and that the additional income should be used not for personal vacation but for medical bills for care the person relies on.

Tucker says that many people believe they will lose their property at the end of their lives in a reverse mortgage situation, but that is untrue; they can maintain ownership and even leave the home to their children or grandchildren. He also says that many people believe they will die with outrageous debt if they choose a reverse mortgage. While a family who plans to move several more times in their lifetimes might find that a reverse mortgage creates too much debt, a senior with a fixed income who has high mortgage or medical expenses could benefit significantly from the arrangement.

It is important to keep in mind when considering a reverse mortgage is to keep an open mind. While fraudulent brokers will peddle the plans any way that makes a person sign the dotted line, brokers with knowledge the depth of Tucker\’s will care most about helping a senior move comfortably and confidently toward the future.