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Old 06-12-2019, 10:46 AM
 
Location: Proxima Centauri
4,797 posts, read 1,980,636 times
Reputation: 5230

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From: USA TODAY: Seniors were sold a risk-free retirement with reverse mortgages. Now they face foreclosure.

Seniors were sold a risk-free retirement with reverse mortgages. Now they face foreclosure.

Quote:
In a stealth aftershock of the Great Recession, nearly 100,000 loans that allowed senior citizens to tap into their home equity have failed, blindsiding elderly borrowers and their families and dragging down property values in their neighborhoods.

In many cases, the worst toll has fallen on those ill-equipped to shoulder it: urban African Americans, many of whom worked for most of their lives, then found themselves struggling in retirement.

Alarming reports from federal investigators five years ago led the Department of Housing and Urban Development to initiate a series of changes to protect seniors. USA TODAY’s review of government foreclosure data found a generation of families fell through the cracks and continue to suffer from reverse mortgage loans written a decade ago...

[mod note] This initial thread post violated the City-Data Terms of Service regarding posting of Copyrighted Material. This post was edited to conform to the T.O.S. By way of a reminder, please do not post an entire copyrighted article, especially a lengthy one. Instead, provide a URL and a brief extract. [/mod note]

Last edited by volosong; 06-12-2019 at 04:00 PM..
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Old 06-12-2019, 10:54 AM
 
71,470 posts, read 71,652,652 times
Reputation: 49055
Who the heck is going to bother to read all that
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Old 06-12-2019, 11:09 AM
 
25,972 posts, read 32,970,649 times
Reputation: 32158
No kidding. Sheesh.
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Old 06-12-2019, 11:10 AM
 
36 posts, read 11,465 times
Reputation: 86
That's one long post!
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Old 06-12-2019, 11:44 AM
 
6,535 posts, read 1,339,947 times
Reputation: 16552
I appreciate the post, but next time, PLEASE post a link with just a summary of what was said in your own words (or else just post the first paragraph with the link).
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Old 06-12-2019, 12:03 PM
 
5,097 posts, read 2,483,020 times
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I read more of the article than I should, and my thoughts are that someone has identified neighborhoods where people are more inclined to default, aligned that with race and now alleges that race was a factor in providing reverse mortgages. I think it's equally possible that low income and perhaps less education influenced decisions to obtain a reverse mortgage. I don't see any reason to make reverse mortgage default a race issue.
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Old 06-12-2019, 12:07 PM
 
6,535 posts, read 1,339,947 times
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Quote:
Originally Posted by Lieneke View Post
I read more of the article than I should, and my thoughts are that someone has identified neighborhoods where people are more inclined to default, aligned that with race and now alleges that race was a factor in providing reverse mortgages. I think it's equally possible that low income and perhaps less education influenced decisions to obtain a reverse mortgage. I don't see any reason to make reverse mortgage default a race issue.
Also, FWIW, I think I read somewhere that problems occur when seniors do not take care of the property (due to age or other reasons), and then the lender has the right to take it back, and then the senior is left with little money and possibly no place to go.

(I could be mistaken about that, though.)
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Old 06-12-2019, 12:15 PM
 
Location: Rust'n in Tustin
2,170 posts, read 2,370,179 times
Reputation: 3786
Tldr, (ask your grandkids).
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Old 06-12-2019, 12:37 PM
 
5,097 posts, read 2,483,020 times
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Quote:
Originally Posted by katharsis View Post
Also, FWIW, I think I read somewhere that problems occur when seniors do not take care of the property (due to age or other reasons), and then the lender has the right to take it back, and then the senior is left with little money and possibly no place to go.

(I could be mistaken about that, though.)
The most common reason stated in the article for default is that the homeowner does not pay home insurance and/or property tax. There are provisions that when someone has failing health, they can remain in the home in spite of default. One example is that of a homeowner who stopped paying home insurance 10 years ago, 6 years ago the property was assigned for foreclosure and the son stepped in to plead failing health. Now the homeowner can live in the property, not pay $20k in unpaid home insurance and the lender can't do anything. I'm still not seeing this as a race issue, but rather one where the homeowner found a loophole and is exploiting it.
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Old 06-12-2019, 01:11 PM
 
Location: Venus
4,760 posts, read 3,188,746 times
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Yeah, it is a long post and I confess, I didn't read it.

However, I had my own reverse mortgage nightmare. My mother was stupid enough to get one even though EVERYONE tried to talk to her out of it. It actually worked out great for my mother because this was right before the housing bubble burst.

Then my mother ended up in a nursing home. After we cleaned out the house, my sister, who had power of attorney, wrote to the mortgage company to inform them that my mother would not be living in the house any longer and they should take possession of it. My mother passed away a little less than a year after that. The mortgage company informed us that my mother needed to be the one to sign it back to them, not the power of attorney. So, ALL of my sibs (including my two nieces who are my late sister's heirs) kept getting visited by someone with papers that kept telling us if we didn't pay, we could lose the house. We didn't WANT the house. This went on for YEARS! We looked through the stack of papers they gave us (a few times) and half of it wasn't even about my mother but someone completely different who's name was close to my step-father's. They kept telling us that they were going to foreclose. We kept telling them, "Please do." I think it was finally about 2 years or so after my mother passed away that they FINALLY sold the house at auction.

My theory is that her mortgage was sold and sold again that they really weren't too sure who actually held the mortgage. They were trying or hoping to get one of us to buy it because they were losing $$$$$ on it. The more they kept trying to get us to buy it, the more they lost. Of course the house was deteriorating for 3 years it sat empty. But, it is not our problem and that nightmare is now over.


Cat
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