Big trouble in reverse mortgage land?

Welcome to Vested Land Services LLC.  Whether you are an investor in commercial real estate, contemplating a home purchase, mortgage refinance, reverse mortgage or home equity loan, we are the title insurance agent to turn to; we do it all.

The New York Times headline reads - "A Risky Lifeline for Seniors Is Costing Some Their Homes."  It's not a pleasant story.

The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.

Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

So why is this happening?  One of the drawbacks of reverse mortgages is the fees associated with obtaining the mortgage. 

Now, as the vast baby boomer generation heads for retirement and more seniors grapple with dwindling savings, the newly minted Consumer Financial Protection Bureau is working on new rules that could mean better disclosure for consumers and stricter supervision of lenders. More than 775,000 of such loans are outstanding, according to the federal government.

Yet,

Used correctly, reverse mortgages can be a valuable tool for seniors to stay in their homes and gain access to money needed for retirement. Seniors who have built up equity in their homes can borrow against a percentage of that and take out a lump sum or a line of credit. The loan doesn’t have to be repaid until the homeowner moves out or dies, but borrowers still have to pay property taxes, maintenance and insurance.

To be sure, three major lenders, MetLife, Bank of America and Wells Fargo have left the marketplace.

Into the void left by the big banks have moved smaller mortgage brokers and lenders. Some of them steer seniors into expensive, risky loans with deceptive sales pitches and high-pressure tactics, according to regulators, housing counselors and elder-care advocates.

Read the full article.

 

 For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Losing sleep over a short sale

Readers of this blog know about the pitfalls and benefits of short sales where a home is sold for less than the amount of its mortgage.

Since a short sale cannot occur without the consent of the lender, sellers are completely subject to the lender’s whims and ineptness.

The New York Times reports on one New Jersey homeowner who lived the short sale nightmare in “A 30-Month Short-Sale Saga” by Antoinette Martin.

“MELANIE BROWN sits at the breakfast bar of the Teaneck house she will soon surrender to new owners and says the pain of that is piercing, but at least the “mental torture” at the hands of bankers and their computerized bureaucracy is finally done, after two and a half years.

“They would demand information, and then delay any response, demand and delay, over and over,” said Ms. Brown, 42, a school administrator, about her lender, Bank of America, and its Equator software system. “I got to feel like a mouse that a cat just kept smacking around.”

“This was a short sale. It took 30 months. And it might not have happened at all — despite Ms. Brown’s sustained effort to meet every shifting deadline for documents, and her real estate agent’s campaign to get help — except that the agent finally contacted an aide to a ongressman, who contacted an aide to the president of Bank of America.”

What was it like dealing with Bank of America? Ms. Brown says,

“No one ever actually talks to you,” “they just send threatening e-mails, saying things like: ‘If you don’t refile those documents for the third time giving the entire history of your life by the end of the business day, then this process is terminated. You will have to start over at the beginning.’ ”

“Ms. Brown’s original loan was from Countrywide Savings Bank, acquired by Bank of America in 2008. When she began asking Bank of America about loan modification, she said, she was told it was impossible, because she was current with her payments.

“They told me I had to stop paying for three months before they could even consider helping me,” she said. “I was shocked. I thought that was drastic, but they said it was the only way.”

Sound drastic, but a common step.

Do you have a short sale nightmare to share? We’d love to hear from you.

Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Refinancing? "Be Cynical About the Refinance Process"

The New York Times’ Jennifer Saranow Schultz writes about the refinance process.

“As least until recently, we’ve been in the midst of a refinancing boom. So consumers applying for refinancings should at least expect some delays.

“While lenders are leery about releasing details about how long refinancings are taking to close today versus a year ago, some are willing to admit that processing times are longer today for a number of reasons, including regulatory changes and historically low rates.”

I’m not sure of the “refinance boom” since most home values in New Jersey fell dramatically over the past two years.

“Kris Yamamoto, a spokeswoman for Bank of America, said in an e-mail that the longer processing times are the result of the “dramatic changes” the mortgage environment has undergone in recent years, including “new underwriting standards being enforced and regulatory changes enacted” to ensure that consumers can safely afford their mortgages. She also pointed to the low rates.”

How about the family that can afford its current mortgage but wishes to take advantage of a lower rate? Unless you had 30% equity, or more, in your home when you took your last mortgage, you can pretty much forget about it since home values have fallen as much as that number. Lenders will not make 100% loan to value mortgages despite encouragement by the Federal government.

So, what to do when you apply and you find your loan application dragging? Some lenders, after already locking the interest rate for 90 days are extending the rate longer if the delay can be found on the bank side. My suggestion—when the lender asks for a document, send it immediately, retain proof of delivery, for example, the fax transmission report or FedEx delivery receipt, and keep in touch with your processor in writing.

Read the full Times story including two cautionary accounts posted by other readers.

What do you think about this issue?

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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From Realty Times - Bank of America ends foreclosure freeze

From Realty Times, back to business for Bank of America.

Part of the freeze is over for 23 states. Bank of America has announced that foreclosures are resuming in over two dozen states. The bank says in its review, it has not found a single occasion where a foreclosure proceeded in error.

The foreclosure freeze was brought about by allegations of wrongdoing by lenders across the country. Here in New Jersey, where foreclosures are supervised by a division of Superior Court, the allegations should prove erroneous. The safeguards are already there.

Read the full report: Real Estate Outlook: Freeze Over In Many States

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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