Daily Archives: July 4, 2015

Widow’s Reverse Mortgage ‘Nightmare’ Underscores Lifeline’s Risks

Arlene Hill needed a financial lifeline. She thought a reverse mortgage would provide it.

Now the 82-year-old widow is fighting to keep the home she has lived in for 45 years.

Regulators have long been concerned that reverse mortgages — a type of home loan that allows older homeowners to access the equity in their homes and defer payment until they die, sell or move out – can put homeowners like Hill in financial peril. All too frequently, they say, brokers don’t clearly outline the potential risks of such an arrangement and homeowners don’t understand what they are buying.

Hill says that she was both confused about the terms of the reverse mortgage she took out on her Simi Valley, Calif., home and misled by a broker who was eager to close a sale.

In 2009, with her husband, Herb, unable to work after suffering a stroke and the onset of dementia and their $345,000 interest-only mortgage on their house due to require principal payments soon, Hill listened when a telemarketer cold-called her to pitch a reverse mortgage.

“I thought, ‘Gee, that would be just wonderful,'” she told NBC News.

At closing, however, the deal got more complicated: In order to qualify for the loan, the broker told her, the Hills would need to pay $180,000 – roughly 90 percent of their savings – to reduce the debt on the home. And Arlene Hill would have to remove her name from the title so that they could qualify for a bigger reverse mortgage based on her older husband’s age.

The broker assured her that she could easily be reinstated onto the title. “He said, ‘Listen, we do it all the time.’ He assured me of that,” Hill said. So with the broker on the phone, “I sat there at the kitchen table along with … the notary, and my husband signed all the papers,” she said.

Three years later, after Herb had died, Hill discovered the broker had failed to tell her that getting her name restored to the title would be costly and wouldn’t happen automatically, as she had been led to believe. “I was just shocked and I called them and said, ‘You must’ve made a mistake,'” she said.

Without her name on the title, she discovered, she no longer had any legal claim to the property. “I gave that money thinking I was going to be protected in my home,” she said.

Read on.

Who’s the Best CEO in Banking?

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And it is certainly not this guy!

Bankers aren’t a modest bunch. To help them determine who really has bragging rights as the industry’s top dog, we crunched the numbers. (Hint: It’s not Jamie Dimon.)

To start, we narrowed the field to the leaders of the 16 biggest¹ global banks. Because this is a test of managerial prowess, we excluded firms owned or controlled by governments and those whose CEOs have been in charge less than three years. Then we plugged their names into everybody’s favorite equalizer: a tournament bracket.

In the first round, the CEOs competed on the most-watched measure of profitability: return on equity.

Read on.

Detroit braces for a flood of tax foreclosures

A fresh wave of foreclosures could destabilize neighborhoods in Detroit, just as they are beginning to recover from the mortgage meltdown.

Wayne County plans to sell 28,545 Detroit properties at auction this fall — including about 10,000 occupied homes — that are three or more years delinquent on taxes. That’s a record number, in part because Treasurer Raymond J. Wojtowicz ended a long practice of avoiding foreclosure on properties with delinquencies of less than $1,700.

Officials said they’re sympathetic, but the days of avoiding paying taxes in Detroit are over.

“We want to keep people in the homes. We realize it’s bad for neighborhoods,” said David Szymanski, the county’s chief deputy treasurer.

“But there are services provided for homes. If you don’t pay your taxes, your neighbor is subsidizing them for you. That’s not fair.”

The tally is down from about 67,000 Detroit properties served with foreclosure notices last fall. That’s because 40,000 owners have agreed to payment plans and other programs offered by the treasurer.

Activists fear widespread devastation, coming atop 139,000 mortgage and tax foreclosures in Detroit since 2005.

Read on.

UBS has whistleblower deal in Brazil currency investigation

Swiss lender UBS AG made a whistleblower deal with Brazilian authorities investigating the suspected rigging of Brazil’s currency market and will receive no punishment in the case, a local newspaper reported on Friday.

The investigation, which involves 15 of the world’s largest banks, began following the presentation of evidence by UBS, Valor Economico reported, without naming its sources.

A UBS press representative did not immediately respond to a request for comment.

In a document released Thursday, antitrust watchdog Cade alleged the banks colluded to influence benchmark currency rates in Brazil by aligning positions and pushing transactions in a way that deterred competitors from the market between 2007 and 2013, at least. Foreign exchange trading in Brazil is estimated at about $3 trillion a year, excluding swaps and derivative transactions.

Read on.

New Hampshire Governor signs foreclosure notice extension law

Gov. Maggie Hassan has signed legislation that forces banks to mail foreclosure notices 45 days before scheduled auctions – nearly twice the number of days than is currently required in the state.

Loan providers are currently required to send notices 25 days before a sale, which is 12 days fewer than homeowners have under federal law to apply for a loan modification.

Lawmakers have been debating the extension for months. Proponents, who initially pushed for a 65-day notice, claim it will align the state with new federal guidelines announced last year through an effort to increase protections on struggling households.

Read on.

IlLINOIS AG ANNOUNCED $1 MILLION SETTLEMENT WITH SAFEGUARD PROPERTIES

Homeowners Illegally Locked Out of Homes to Receive Restitution

Chicago — Attorney General Lisa Madigan today announced a $1 million settlement with Safeguard Properties LLC over allegations the company illegally locked Illinois residents out of their homes before a foreclosure was finalized.

Under Madigan’s settlement, Safeguard, a Delaware corporation based in Ohio, must pay $1 million, nearly all of which will be paid to Illinois residents who filed complaints over Safeguard’s practices. Safeguard must also follow 40 operating standards in conducting inspections and other services relating to Illinois properties set by Madigan’s office to ensure homeowners’ rights are protected.

Safeguard is the largest company in the country hired by mortgage lenders to determine whether homeowners in default or facing foreclosure are living in their homes. If a property is deemed vacant, Safeguard is responsible for securing and maintaining the property to ensure it does not lose value after it is foreclosed. Madigan alleged in a 2013 lawsuit that Safeguard wrongly deemed homes vacant, instructing its contractors to shut off utilities, change the properties’ locks and illegally remove residents’ personal belongings even though they actively remained in their homes.

“When I filed this lawsuit, Safeguard was illegally breaking and entering into homes, often removing residents’ belongings and locking people out,” Madigan said. “I am pleased that this settlement will provide some compensation for the nightmare they caused these homeowners and that it will ensure that Safeguard does not employ these brazen practices moving forward.”

Read on.