Before the onset of the financial collapse a broad spectrum of bottom feeders were doing Banksters’ dirty work for them shilling their subprime and ninja loans to those whop would never afford to pay them. Now that the Republican recession has dried up that market, the same people are now preying on Seniors. Not surprisingly, the Republican Party is fighting to allow them to continue.
The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.
Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.
Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
Now, as the vast baby boomer generation heads for retirement and more seniors grapple with dwindling savings, the newly minted Consumer Financial Protection Bureau is working on new rules that could mean better disclosure for consumers and stricter supervision of lenders. More than 775,000 of such loans are outstanding, according to the federal government… [emphasis added]
Inserted from <NY Times>
Photo credit: Huffington Post
You may ask how I support my statement that Republicans are fighting to allow this practice to continue. The CFPB has only an interim Director, a recess appointment by Barack Obama, because Senate Republicans vowed to block any nominee for CFPB Director, not on his or her own qualifications, but because they object to the existence of the CFPB. Furthermore, both Lord Willard and Lyin’ Ryan have promised the repeal of Dodd-Frank, eliminating the CFPB. The bottom line is this. Republicans oppose anything intended to protect the 99% from 1% vulture capitalists.
8 Responses to “Vulture Capitalists Prey on Seniors”
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Never would consider such a loan — my rule is I never buy anything that is 'advertised' on TV by ' has been' actors and such– It has been a good rule–
Good!
Reverse mortgages, – Bad idea…!
I find it so hard to believe that this continues still after the recent collapse… If it seems to good to be true, it is…
I understand there are good reverse mortgages. But vulture capitalists are selling bad ones and Republicans are helping.
It's hard to believe that some people are still falling for the pitch of the snake-oil salesmen.
It sure is!
From Wikipedia — "A reverse mortgage is a form of equity release (or lifetime mortgage). It is a loan available to home owners of retirement age, enabling them to access a portion of their home's equity. The home owners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit, or some combination thereof (e.g.., into aged care)…."
As a banker, I know that reverse mortgages fit a certain niche market and can provide some non taxable income for older home owners. However, with interest compounding, it is extremely adept at eating away at the value of the asset in estate terms. This is probably one of the biggest things people just don't understand.
In terms of the US market, given the predatory nature of the sub prime lenders, indeed regular lenders too, the CFPB is absolutely necessary to protect the elderly and less financially sophisticated consumers. That people like Romney and Lyin' Ryan would allow banksters to prey on the elderly is particurly vile. But what more would you expect from two soulless individuals, indeed a soulless party like the Republican/Teabaggers?
Thanks for the professional insight!