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Posts Tagged ‘HUD’

Protecting Yourself Against Mortgage Fraud

Posted by Larry Doyle on June 18th, 2010 9:20 AM |

Financial distress leaves people increasingly vulnerable to financial predators and resulting financial scams and fraud. With homeowners increasingly underwater on their mortgages, the scum in our society are diligently pursuing and perpetrating their vile works. Homeowners looking to modify their mortgages or otherwise investigating avenues of financial assistance need to be exceptionally careful at this point in time.

What should homeowners do? I would highlight two recommended paths. In my local paper this morning were rules of the road to Avoid Becoming a Victim of Fraud:

According to an FBI advisory, these are steps to take to avoid becoming the victim of mortgage fraud: (more…)

Cash Strapped Seniors Beware!!

Posted by Larry Doyle on October 6th, 2009 2:53 PM |

Tapping home equity was a prime driver in leading us into our current economic crisis. The same dynamic with an added twist may very well be setting the table for another round of fraud and accompanying problems.

I refer to the housing finance product known as a reverse mortgage. This product is targeted primarily at our senior citizens who are cash strapped. Rest assured many a mortgage banker who is currently hard pressed to generate fees and earnings will attempt to take Grandma and Grandpa ‘to the hoop’ with this product.

While many quality professionals within the mortgage industry will work to highlight the potential pitfalls with reverse mortgages, do not think for a second that those messages will make their way to every customer.

Bloomberg highlights that our legal profession is starting to take notice of this ‘racket’ and writes, Reverse Mortgages May Be ‘Subprime Revisited’:

Reverse mortgages may be the next subprime crisis, according to the National Consumer Law Center.

Some of the same U.S. lenders that helped drive the real estate boom with loans to home buyers who couldn’t afford the payments are now targeting seniors, the center said. Brokers, who are given financial incentives to sell the loans, may be making misleading claims to potential customers, according to a report released today by the Boston-based NCLC.

“This market is designed to serve seniors, so when we find abuses cropping up and migrating from the subprime market to the senior market, that sounds an especially loud warning bell,” said Rick Jurgens, an advocate at the National Consumer Law Center, who contributed to the report.

Reverse mortgages enable people aged 62 and over who are looking for extra cash to use the equity in their homes and receive lump-sum payments, periodic checks, a line of credit, or a combination of the three. Lenders are repaid from the sale of the home when the borrowers die or move.

The former maximum payout for reverse mortgages backed by the Federal Housing Administration was $417,000. That limit was increased temporarily to $625,500 in February. Origination fees are capped at $6,000. In 2008, more than 100,000 seniors used reverse mortgages to tap over $17 billion in home equity, according to the Housing and Urban Development Department.

I implore anybody who reads this commentary to fully explore the implied mortgage rate and home appraisal values utilized with reverse mortgages.

Any questions, please do not hesitate to ask or to utilize the mortgage primers (in the left sidebar) here at Sense on Cents to learn more about this product.

LD

Mortgage Modification Guidance

Posted by Larry Doyle on March 14th, 2009 12:00 PM |

There is little doubt that there was massive fraud perpetrated by unsavory and unethical mortgage brokers during the housing boom.  I do not mean to paint all mortgage brokers with the same brush. As with any industry, there are a tremendous number of highly ethical people working hard to make an honest living. Regrettably, not everybody falls into that camp.

Our economy would be well served if both local and federal authorities worked harder to expose the criminals in the system, indict them, prosecute them aggressively, and make them pay a very stiff price for their actions.

Not too surprisingly, some of the same ilk that wrote fraudulent mortgages are now populating the mortgage modification industry. People need to be exceedingly careful in engaging those who seem to want to help them modify their mortgage. (more…)

Economic/Market Highlights 1/5/09 . . . “Bad and Getting Worse”

Posted by Larry Doyle on January 6th, 2009 10:00 AM |

On the first real day of business after the holidays, I will tip my hat to PEBO and his economic team. Obama opened his press briefing this morning with his take that the economy is “bad and getting worse.” In deft fashion, he then caught almost everybody off guard by leading his proposed economic stimulus plan with focus on a significant level of tax cuts and tax credits. In my opinion, this was a very, very strong first move. Well done, Barack!!

The general outline of these cuts and credits include:

1. tax cuts for those paying taxes or with an earned-income credit. Likely for families earning up to 200k, although that is not yet defined.

2. businesses can retroactively reduce tax bills going back 5 years by writing off losses from 2008 and 2009.

3. offer tax credits to entice firms to plow money back into new investments.

4. provide a one year tax credit for companies that make new hires or forego layoffs.

5. increase write-offs for a wide array of expenditures for small business.

(more…)






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