Quite a few seniors are feeling the pinch of higher gas prices. With so many living on a fixed income, they are cashing in on their homes by taking out a reverse mortgage. Reverse mortgages have become increasingly popular over the years. Instead of making a monthly payment, the homeowner receives a monthly check against the value of their home. Reverse mortgages are payable only when the last surviving borrower dies, sells the property, etc.

A reverse mortgage isn't for everybody. You may not have enough equity in your home to qualify for a reverse mortgage, plus there are other factors to consider. Talk to a qualified mortgage expert first before signing anything.

Next month, Michelle Augustine plans to walk away from her four-bedroom house in San Fransico, CA., subdivision and let the property fall in foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby. "I can find the same exact house as what I live in right now for half the price." she says.

Sound to good to be true? Well ethically it is and perhaps legally as well. Some are calling it mortgage fraud, but the practice is gaining ground. Here's how it works. First homeowners provide a rental agreement showing that they will rent out their first home. Then the underwriters allow rental income to cover as much as 75% of the mortgage payments on the first home, thus increasing the borrower's income when determining if the borrower can make payments on two homes. This allows homeowners to secure a second mortgage that they might not otherwise afford to buy another home. 

You can read the rest of the Wall Street Journal article here.