As I have been active in Hartford for a long time, I notice an influx of inquiries whenever news reports about reverse mortgage scams come out. Recently, a customer requested a consultation after seeing an article about reverse mortgage scams targeting the elderly, expressing that it made them anxious. While the Home Equity Conversion Mortgage (HECM) is a regulated product backed by the Federal Housing Administration (FHA), it is true that there are attempts to exploit it for fraudulent purposes. Common tactics include collaborating with home remodeling companies to recommend unnecessary renovations or steering loan funds toward other investments. Therefore, it is essential to review the safety measures of the program one by one.

The most important safety measure is the mandatory counseling from a HUD-approved counseling agency before applying. If any lending institution demands a signature without counseling or encourages enrollment linked to specific investment products, that itself can be seen as a warning sign. In a formal process, applicants must meet with an independent counselor to discuss their financial situation and alternatives. Counselors play a role in reviewing the applicant's financial status and other support programs, so any suggestion to skip this step should be viewed with suspicion.

Looking at the market conditions in Hartford, as of April 2026, the median home price is reported to be around $245,000. Even within the same period, conditions can vary significantly by neighborhood, with Hartford having one of the highest mill rates at 68.95 mills among the 169 towns in Connecticut. Connecticut calculates property tax by assessing the property value at 70% of the market value and then multiplying it by the mill rate, which can make the actual burden feel heavier than in other areas. Just moving one block over to suburban towns like West Hartford or Glastonbury can result in a significantly lower mill rate, so it is essential to check which town you belong to, even within the Hartford area.

This aspect of property tax intersects with reverse mortgages. Even if you receive a reverse mortgage, the obligation to pay property taxes and homeowners insurance remains. In fact, you must pass a financial capability assessment to ensure you can continue to manage these payments for the loan to be approved, and failing to pay taxes or insurance after approval can lead to default. In areas like Hartford with a high mill rate, it is crucial to calculate this aspect carefully.

The reason Hartford's mill rate is particularly high is worth noting. About half of the land area in Hartford is occupied by tax-exempt properties such as hospitals, universities, and state government buildings. As the taxable assets are thus limited, the remaining residential and commercial properties bear a relatively larger burden. Consequently, Hartford's mill rate is two to three times higher than that of surrounding suburban towns, and it is essential to simulate whether you can continue to manage this tax burden after retirement.

Examining the basic structure of reverse mortgages, homeowners aged 62 and older can receive funds against their home as a lump sum, monthly payments, or a line of credit, with repayment occurring when the home is sold, the homeowner passes away, or the home is no longer used as the primary residence. The initial costs, including origination fees, mortgage insurance, and closing costs, tend to be higher than those of traditional mortgages, and it is also important to understand that the equity may decrease over time, reducing the inheritance assets.

As of 2025, the population aged 65 and older in Connecticut is about 17.4% of the total, indicating a steadily increasing proportion of elderly residents. With the growing retirement population, the potential for scams targeting them may also rise, so it is advisable to consult thoroughly with a HUD-approved counselor and discuss with family before hastily deciding on a specific lending institution or product. This article is not investment or legal advice, and it is recommended to consult with professionals before entering into any contracts.