Senior Homeowners at High Risk for Fraud and Subprime loans-STILL

There's no shortage of talk about the sub-prime market and the damage it has done to both the housing market and unsuspecting families. We haven't seen the last of predatory lending. In fact, recent events are creating the perfect storm for unscrupulous lenders to take even FURTHER advantage of our elderly.

The Seattle times did two different articles that outline what senior homeowners are up against.  The first article, "The fleecing of Frances Taylor" will keep you up at night. It outlines a string of events and a very long list of "professionals" who got in line to take advantage of a Taylor, a senior with $2 million in assets, who is now bankrupt. The second, "Homeowners in debt, seniors prime target of riskiest loans" spells out the dangers for our elderly who have a large amount of equity in their homes.

More than one in three borrowers in King County who got loans from the same lender that foreclosed on Taylor were 50 or older, and one in seven was 60 or older, according to a Seattle Times analysis of more than 4,000 loans by Ameriquest Mortgage. Not only that, nearly all of those borrowers already owned their houses. Seattle Times.

Now we find ourselves 1-2 years after these seniors have filed Chapter 13 personal bankruptcies.  For many of them their credit-card debts have been discharged or dismissed but the bankruptcy proceedings are not yet finalized.

Lenders can now develop a list of consumers with lower credit scores, but considerable equity in their homes. (Who has considerable equity? People who have lived in their homes for a long time...seniors).  These lenders approach these consumers promising to get them out of bankruptcy for a price, typically offering a new home loan with more fees and a higher interest rate. A new home loan+more fees=a higher house payment for seniors who are often choosing between paying the heating bill, buying groceries, or buying prescriptions. If you're unable to pay the mortgage, the bank takes your home.

This will keep me up at night.

Comments

[Steve Kirk]

What keeps me up at night are the myriad schemes in play to defraud the frail and elderly. I hear of a new one every day. Robbing seniors of their most precious asset, their home, is among the worst. I hold the lenders responsible not only for predatory lending practices but also for elder abuse of the first order. Steve Kirk writes for seniors, their family and caregivers at www.theperfectsense.com.