Consumer complaint received 2020-02-08
Company: AMERICAN ADVISORS GROUP
State: MI
Product: Mortgage
Sub-product: Reverse mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
If youre thinking about taking out a HECM Reverse Mortgage with AAG ( or with someone else ; shop around and talk to a financial advisor or planner first ) be very, very careful ( if you have an older house ), it is risky - YOU CAN LOSE IT IF YOU DO NOT MAKE PAYMENTS. It maybe good for some, but for me it was a big mistake to consider it. Example : First they required me to sign a stack of legal documents about one-half inch thick ( Im not exaggerating ) late at night just before the cafe was to close with a notary public without reading over the documents which would have taken a few hours and the copy of documents I received, for some reason didnt exactly look like the ones I signed when I got home ( I maybe wrong on this there were so many ) ; these documents were based on the value of my home from what a XXXX price was. A value AAG does not accept. 
They do not tell you the fees associated with it up front ; you have to apply for the loan first. Fees are VERY high. 

Second, I had to have a talk with a consultant for {$120.00} as to what a HECM is which was a waste of time and money because if one goes to XXXX XXXX XXXX it explains it very nicely and in more detail. 

Third, I had to have a HUD inspector come to the house for {$450.00} to evaluate the house and bring it up to HUDs standards at my expense. Either she was incompetent or HUDs evaluation procedure needs fixing. The price she placed on my home was way below the value of the house by half or more by comparing it to similar homes within five miles that had been recently sold ; this would work if the house was in a track home complex where every house looked the same but not all different types of houses as in my area that may or may not be similar based on square footage, acreage, and whatever else. 

Fourth, AAGs fees are too high. Initiation fee and all the other fees ( thousands of dollars ) they tack on using a higher interest rate than the national mortgage rate, plus, if a Line of Credit is used, they can jack up the interest rate over the life of the loan ; its not a fixed rate, so when it comes time to sell, one doesnt know what the actual cost of the loan is. 

Fifth, having to deal with someone over the telephone or email whose a thousand miles away. 

Sixth, if one takes too long to accept all their paper work, understand it, and terms, they ( seems like ) will pressure you to accept or have the application canceled.

Seventh, Not deciding if I want to take the loan or not, AAG switched my home owners insurance to them, did not pay the bill, and I got a notice my house insurance was being canceled - they made a huge blundering mistake! and hinted huffily I made the mistake - I never told my insurance company. 

Eight, I sent them emails with questions only to get some questions answered, some partly or incomplete and some not at all. 

Ninth, I started on the premise I wanted a HECM ( and still do? ), but after all of the above, I decided it wasnt worth it with AAG. They offered me a paltry sum up front and said maybe Id get more in a year while charging thousands of dollars upfront that would be tacked onto the loan balance and charged variable interest for the life of the loan. Like I said, for some it may work, I consider it a scam. If you need money, there are other alternatives to consider like talking to a bank, financial advisor or planner first - research & research & research. Hope you have better luck let the BUYER BEWARE!

Company public response: Company believes the complaint is the result of a misunderstanding
Company response to consumer: Closed with explanation