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Older Borrowers, Out in the Cold
Wall St Journal ^ | 4/14/2009 | Ellen Schultz

Posted on 04/14/2009 5:45:25 PM PDT by 1066AD

REAL ESTATE APRIL 14, 2009, 4:02 A.M. ET Older Borrowers, Out in the Cold By ELLEN E. SCHULTZ YUBA CITY, Calif. -- In 2006, Carol Couts, a 66-year-old widow in Yuba City, Calif., was living in her home, payment-free, when a mortgage broker persuaded her to refinance her no-cost mortgage for one that exceeded her monthly income by more than $400.

She can't afford the payments, and unless her lender modifies the loan to make it affordable, she'll lose her home of 25 years.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Crime/Corruption; Culture/Society; Extended News; News/Current Events
KEYWORDS: bubble; fannie; fraud; mortgage
I normally don't have a lot of sympathy for people who overdo the $$ borrowing. However the examples here are out and out fraud & deception, predatory doesn't even begin to describe it.

Wasn't Fannie CEO found to have cooked the books to max out his bonus ? What happened ? When does he go on trial ?

1 posted on 04/14/2009 5:45:25 PM PDT by 1066AD
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To: 1066AD
What they needed is friend telling them "don't do it!"


2 posted on 04/14/2009 5:50:15 PM PDT by darkwing104 (Lets get dangerous)
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To: darkwing104
In 2006, Carol Couts, a 66-year-old widow in Yuba City, Calif., was living in her home, payment-free, when a mortgage broker persuaded her to refinance her no-cost mortgage for one that exceeded her monthly income by more than $400.

I'm sorry but how does one live to be 66 and be that stupid about finances?
3 posted on 04/14/2009 5:53:29 PM PDT by Kozak (USA 7/4/1776 to 1/20/2009 Requiescat In Pace)
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To: 1066AD

Here’s a paragraph in the story...

Legal-aid attorneys challenged the foreclosure on the grounds that the underlying loan was fraudulently made. Fannie Mae is now in the process of setting aside the foreclosure and modifying the loan. “We intend to work with the borrower to reach a resolution that will allow her to remain in the home,” says a spokeswoman.


4 posted on 04/14/2009 5:54:35 PM PDT by Star Traveler
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To: Kozak

I don’t know but my mother was 68 when my dad died and she couldn’t reconcile her bank statement. I don’t know what would have happened if I hadn’t been there to do it all.


5 posted on 04/14/2009 5:56:29 PM PDT by tiki (True Christians will not deliberately slander or misrepresent others or their beliefs)
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To: Kozak
I'm sorry but how does one live to be 66 and be that stupid about finances?

I've seen it and I am still amazed


6 posted on 04/14/2009 5:56:54 PM PDT by darkwing104 (Lets get dangerous)
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To: Kozak

Read into the article, she was told her reverse mortgage was going away and fell for an in-home con job.


7 posted on 04/14/2009 6:00:29 PM PDT by 1066AD
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To: Kozak

“I’m sorry but how does one live to be 66 and be that stupid about finances?”

It’s actually quite easy, especially if one spouse handles the finances for the couple. The other spouse will often be quite in the dark about the condition of their finances and financial matters in general. Plus, they can be especially vulnerable in the months right after the spouse has passed.

The problem is these people seldom seek help until after they are in trouble, instead of sounding a proposed action out ahead of time. If you don’t have kids to help out, then find friends, neighbors, fellow parishioners. There are any number of people who can give you good, independent advice. It’s so much easier to prevent problems in the future than to untangle the mess afterwards.


8 posted on 04/14/2009 6:03:20 PM PDT by caseinpoint (Don't get thickly involved in thin things)
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To: 1066AD

Good Grief! How STUPID...or GREEDY is she??? 66 isn’t THAT old! what happened to the MONEY SHE GOT????


9 posted on 04/14/2009 6:05:57 PM PDT by Ann Archy (Abortion....the Human Sacrifice to the god of Convenience.)
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To: 1066AD
Perpetrating financial fraud is a crime. I just wish whoever did it got plenty of jail time. No honest bank or lender would push products on people who clearly don't need 'em.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

10 posted on 04/14/2009 6:06:02 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Ann Archy

*In 2007, she received numerous phone calls from a mortgage broker named Daniel Lewis. According to Mrs. Couts, he told her he was contacting seniors to warn them that banks were canceling reverse mortgages because they were unprofitable. She would have to refinance her home, he told her, or lose it. (This wasn’t true; reverse mortgages generally aren’t repayable until death.)*

*Mrs. Couts signed a document that said she could cancel within three days, and also signed documents that she thought were for a 30-year conventional loan with low monthly payments. The next day she saw that the application listed her income as $5,075 a month. She called Mr. Lewis to point out the error and to cancel the loan, but says he told her it was too late to change anything.*


11 posted on 04/14/2009 6:10:33 PM PDT by DevNet (What's past is prologue)
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To: DevNet
Sorry....not buying it. I saw THREE STUPID women on TV last week....one black woman had Negeative income and One MILLION in houses....One said she was old....white hair, so how was she to KNOW anything....one...don't even remember what she looked like, but they ALl had one thing in common....they took NO responsibility...NONE!! It disgusted me.

All these peole got MONEY....wheer is it??

12 posted on 04/14/2009 6:17:49 PM PDT by Ann Archy (Abortion....the Human Sacrifice to the god of Convenience.)
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To: 1066AD

This is nothing more than a story of someone who borrowed money against her house KNOWING that she could not make the payments. What happened to the money she borrowed? She probably blew the money in Las Vegas and now wants us to feel sorry for her.


13 posted on 04/14/2009 6:36:33 PM PDT by Blood of Tyrants (Socialism is the belief that most people are better off if everyone was equally poor and miserable.)
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To: Ann Archy

>> Good Grief! How STUPID...or GREEDY is she??? 66 isn’t THAT old! what happened to the MONEY SHE GOT????

Those are good questions.

Before you get too harsh, however, keep in mind that many older folks suffer from a degree of dementia that makes them easy targets. Even as early as their 60’s.


14 posted on 04/14/2009 7:17:41 PM PDT by Nervous Tick (Party? I don't have one anymore.)
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To: 1066AD

Looks like there are a lot fo people in the world that shouldn’t be allowed to run their own financial affairs. To be tricked that easily and not read anything is unbelievable! The reverse mortgage too are questionable. I know that if someone is out of their home for more than 30 days, say in the hospitla and rehab, some have the right to take the home then rather than at death!


15 posted on 04/14/2009 7:33:14 PM PDT by chris_bdba
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To: Kozak
I'm sorry but how does one live to be 66 and be that stupid about finances?

My parents questioned this as well...until my grandmother got mixed up with some guy trying to talk her out of the deed to her home.

Grandma had been on her own for more than 20 years by this time and had taken care of her own finances (Grandpa died young). She had never been the type to allow herself to be pushed around. We have family members who we can see are pretty easy "marks". Grandma wasn't one of them!

I think elderly people just become more able to be confused and intimidated. There are so many scams out there.

16 posted on 04/14/2009 7:39:37 PM PDT by Dianna (Obama Barbie: Governing is hard.)
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To: chris_bdba
Looks like there are a lot fo people in the world that shouldn’t be allowed to run their own financial affairs.

Unfortunately, you're unlikely to know there is a problem until a problem has occurred. Hopefully, it will be a small matter of an unpaid bill or two instead of, "I've gotten into a morgage I can't repay."

17 posted on 04/14/2009 7:42:26 PM PDT by Dianna (Obama Barbie: Governing is hard.)
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To: Kozak
I'm sorry but how does one live to be 66 and be that stupid about finances?

She's a widow. Based on this story - I'd say a very good chance her late husband handled the finances.

18 posted on 04/14/2009 7:48:59 PM PDT by GOPJ (The New York Times can compress the most words into the smallest ideas of anyone- bow to Lincoln)
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To: Dianna

I’ve already had it happen. My DM refinanced and refinanced until she couldn’t afford the home that she inherited from my DGM. It was said to see it go 3 years ago but I couldn’t afford to buy it and if we had now it wouldn’t be worth what she needed for it. :( My DM is only 68 now just horribly irresponsible with money.


19 posted on 04/14/2009 7:55:47 PM PDT by chris_bdba
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To: Nervous Tick

<many older folks suffer from a degree of dementia that makes them easy targets

OK, true for “older folks,” but this woman was 66! That’s 11 years older than I am. I hope to heaven I am not that stupid in 11 years. Since many boomers will have to work until they’re 70, we’re all in trouble if we start getting dementia in our 60s!


20 posted on 04/14/2009 7:58:09 PM PDT by radiohead (Buy ammo, get your kids out of government schools, pray for the Republic.)
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To: 1066AD

In California this is a felony under the recently enacted Elder Abuse statutes. They were enacted to cover almost exactly the same issues in a case in Richmond.


21 posted on 04/14/2009 8:00:24 PM PDT by editor-surveyor (The beginning of the O'Bummer administration looks a lot like the end of the Nixon administration)
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To: Kozak
"I'm sorry but how does one live to be 66 and be that stupid about finances?"

Hey, one of them just got elected President!

22 posted on 04/14/2009 8:01:47 PM PDT by editor-surveyor (The beginning of the O'Bummer administration looks a lot like the end of the Nixon administration)
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To: radiohead

I hope to heaven I am not that stupid in 11 years.

It’s amazing how fast you can lose it.


23 posted on 04/14/2009 8:06:50 PM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: DevNet

This was a very common con about eight years ago, before specific criminal statutes were enacted to deal with the convoluted circumstances that can be involved.


24 posted on 04/14/2009 8:07:15 PM PDT by editor-surveyor (The beginning of the O'Bummer administration looks a lot like the end of the Nixon administration)
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To: tet68
"It’s amazing how fast you can lose it."

Especially if you've been irresponsible all your life, and your spouse dies, and there is no longer anyone to slap you upside the head and wake you up!

25 posted on 04/14/2009 8:14:09 PM PDT by editor-surveyor (The beginning of the O'Bummer administration looks a lot like the end of the Nixon administration)
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To: DevNet
At the very least, Lewis's refusal to honor California's statutory 3-day documentary cooling-off period should be actionable.

Even so, you'd think that before giving this tout the time of day the woman would have rubbed her two remaining neurons together and contacted (1) her relatives, (2) the institution holding her reverse mortgage, (3) her lawyer, (4) the Sutter County Department of Elder Affairs, and (5) the state's Department of Consumer Affairs. Not necessarily in that order.

26 posted on 04/14/2009 8:39:41 PM PDT by Tenniel2 (Memo to politicians: Don't worry about "shovel-ready." Worry about "pitchfork-ready.")
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To: Kozak

My aunt, who was always single and always in charge of her own finances died at age 80......with a drawer full on tax notices from the IRS. No big thing to straighten out if we had found it out while she was alive, but damn near impossible after she died.

At some point things just break down.


27 posted on 04/14/2009 8:54:11 PM PDT by Balding_Eagle (If Liberals would pay their taxes, there would be no deficit..)
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To: Balding_Eagle

Thats how I want to go. Owing the IRS a bundle....


28 posted on 04/14/2009 10:21:39 PM PDT by Kozak (USA 7/4/1776 to 1/20/2009 Requiescat In Pace)
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To: chris_bdba
The reverse mortgage too are questionable. I know that if someone is out of their home for more than 30 days, say in the hospitla and rehab, some have the right to take the home then rather than at death!

Are you sure about that?

RM's are pretty highly regulated now.

Anyone that signs on to that is foolish.

29 posted on 04/14/2009 10:29:55 PM PDT by Syncro (Qui non intelligit, aut taceat, aut discat)
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To: 1066AD
Wasn't Fannie CEO found to have cooked the books to max out his bonus ? What happened ? When does he go on trial ?

I imagine Barney Frank wouldn't like that as he was hand in glove with the scandal and got lots of cash for his political campaigns from the Fanny and Freddy people.

And I would imagine some in his back pocket.

He and Dodd, Pelosi, and Reid should be on trial along with their cohorts in crime at Fanny May. (I spell it that way because Frank gets a kick out of seeing it in that form)

30 posted on 04/14/2009 10:36:45 PM PDT by Syncro (Qui non intelligit, aut taceat, aut discat)
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To: chris_bdba
No monthly payment is due from the home owner unless he or she dies, moves or sells the home. At that time the loan is due in full, plus interest and fees.

The home owner can receive monthly income from a reverse mortgage as long as he or she lives in the home as a primary residence.

31 posted on 04/14/2009 10:39:38 PM PDT by nufsed (One house temporary legislature. No bennies for illegals.)
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To: Kozak
That's easy. People learn the wrong thing all the time. As they get older harder to change their mind and get them to trust new sources of info.

We do financial planning and get called all the time to help seniors. Most are not trustful of people they don't already know. Some distrust their children or listen to the wrong child who really doesn't know much.

Here's a simple test. Ask how many here think it's a good idea to pay off their house or build their retirement upon a tax deferred investment. I'll bet it's over 90%. And they're all sure they're right.

32 posted on 04/14/2009 10:44:08 PM PDT by nufsed (One house temporary legislature. No bennies for illegals.)
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To: radiohead

>> OK, true for “older folks,” but this woman was 66!

My mother was diagnosed with Alzheimer’s at age 57 and passed away from complications of the disease at age 60.


33 posted on 04/15/2009 7:59:03 AM PDT by Nervous Tick (Party? I don't have one anymore.)
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To: Syncro

Yes I am very sure about them. I watched an olkder relative who signed up for one have her home takenwhen she broke her hip and went to rehap. Fine print in a lot fo them say that if you are out of the home for X amount of time, in her case it was 30 days the house goes to the lender as if they had died.


34 posted on 04/15/2009 9:21:28 AM PDT by chris_bdba
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To: chris_bdba
How long ago was that, and what was the approximate date she got her reverse mortgage?

Thanks very much for the response, this information is very helpful to me.

35 posted on 04/15/2009 11:36:13 AM PDT by Syncro (Qui non intelligit, aut taceat, aut discat)
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To: Syncro

When she got it, I can’t tell you but she lost the house probably 3 or 4 years ago?Her kids didn’t even know she got it until she was in rehab and they were able to see the letters the lender was sending.


36 posted on 04/15/2009 1:12:29 PM PDT by chris_bdba
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To: chris_bdba
Thanks!

That was SOP back then.

I'm in the process of investigating how they work now, and what the regulations are that changed the way they are written.

37 posted on 04/15/2009 1:37:47 PM PDT by Syncro (Qui non intelligit, aut taceat, aut discat)
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To: Nervous Tick

I understand that some people get early Alzheimer’s. What I’m protesting against is the idea that people in their 60s are somehow incompetent based purely on age.


38 posted on 04/15/2009 2:18:28 PM PDT by radiohead (Buy ammo, get your kids out of government schools, pray for the Republic.)
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