Did You Know...

Did You Know...

... that elderly homeowners are experiencing widespread theft of their home's equity? The elderly have been targeted and induced into financial arrangements that result in the loss of equity in their homes or, worse yet, the loss of their homes. These scams include predatory lending, foreclosure rescue and estate planning.

Predatory lending is the practice of selling homeowners mortgage loans that are contrary to the homeowners' financial interests or abilities to pay. Predatory loans may have complicated, adjustable interest rates, balloon payments, hidden fees and other undisclosed conditions that make them expensive, difficult to understand and abusive. The greatest problem with these loans is that they are made without regard to the borrower's ability to pay.

Foreclosure rescue scams target properties facing mortgage or tax foreclosure.  These foreclosure rescue scam operators convince homeowners that they will save the home if the homeowner pays them a fee for their services or if the homeowners deed their home over to them for no money.  Frequently, the homeowners are led to believe they are refinancing or that the investor will help them buy back the home on favorable terms.  Other times, the homeowners are led to believe that they are paying for attorney representation in foreclosure court proceedings and come to find out, only too late, that their home has already been sold at sheriff's sale.

Estate planners sell investment products to elderly homeowners who obtain reverse mortgages on their homes with the hope that they will earn more money from investing than it will cost to pay on the loan. Not all estate planning is exploitive and can be very useful for people with other assets and a small income. It becomes abusive when the home is the only asset that the individual has and the equity in the home drained.  As a result, the homeowner is left with no asset to borrow against to allow a roof repair or a new furnace.

If any of these situations apply to you or your clients, please speak with an attorney before entering into any sort of contractual or financial arrangements.  Homeowners should be made aware that there are numerous free resources to help them if they are having difficulties in keeping their homes.  Homeowners can call the statewide foreclosure prevention initiative, Save the Dream, at 1-888-404-4674 for referrals to housing counseling agencies and legal services.

Staska Keefer
Attorney at Law