And the parasites have found a new way to help destroy America from the inside out:
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.
Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
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.
Concerns about the multibillion-dollar reverse mortgage market echo those raised in the lead-up to the financial crisis when consumers were marketed loans — often carrying hidden risks — that they could not afford.
“There are many of the same red flags, including explosive growth and the fact that these loans are often peddled aggressively without regard to suitability,” said Lori Swanson, the Minnesota attorney general, who is working on reforming the reverse mortgage market.
The FIRE sector will be the death of this nation. Somewhat related, this Chrystia Freeland op-ed on how the 1% are destroying the country and, unwittingly, themselves.
zmullls
Wingnut response: They knew the risks, personal responsibility, nobody forced them to take on these loans blah blah blah.
And coffee is for closers.
gene108
OT: What about an NFL thread John?
BGinCHI
Last week on NPR I heard a report on the earnings of the big banks for the current quarter.
Chase up 34% from last year.
Wells Fargo something like 22%.
How much more money do oil companies and financials need to make before they will stop wrecking politics as well as the fundamentals of people’s lives?
We need to stop calling them parasites. Parasites are almost always evolved enough to know not to kill their host.
PreservedKillick
@zmullls:
And, under voucher care, “Granny should have known the risks when she signed up for an insurance plan which didn’t cover colon cancer”, etc.
rikyrah
loathe these sociopaths.
sb
An ugly story that keeps getting repeated.
Awful.
gene108
@BGinCHI:
Big banks aren’t the problem in this case. Also, the real issue isn’t whether or not a company is more profitable, but how those profits get distributed.
Right now those profits go to shareholders and those employees with stock options.
For the rest of the folks it doesn’t really impact them.
the Conster
Won’t anyone think of
the childrenFred Thompson and Robert Wagner?Schlemizel
What the
closers don’t get is that after they have set fire to very dollar everyone else has nobody will be able to feed their addiction for “the deal”. Sure, they can still screw grams & gramps out of their false teeth but that won’t really feed the itch.Eventually we’ll all have to be surfs on their plantations. Unless we really do take to the streets and introduce these scum to the sharp edge of the blade.
BGinCHI
@gene108: I take your point about these loans coming from smaller entities, but don’t most mortgages then get bought up by the big banks? Ours certainly did (Chase).
Also, I can agree with this:
That might be true if the company had no impact on our larger society as a whole, but that’s not the case here. Big financial institutions cause lots of harm in terms of how they use their profits politically, as well as who they take money from to redistribute it to shareholders and so on.
If you were talking about companies with real utility then that would make sense. That’s why I chose the two examples I gave.
quannlace
But…but Fred Thompson says they’re great. I see his commercials all the time and he did run for President!
raven
Fred Thompson is PROUD of these swine.
Redshift
It’s sprinkled with a few both-sides false equivalences, but overall quite good.
Odie Hugh Manatee
But Robert Wagner says that it’s a safe way to have your cake and eat it too! Does this mean that he’s been lying to old people to collect his own retirement money?
Where’s Austin Powers when you need him? Dr. Evil is clearly behind this!
PurpleGirl
Have the retirement you deserve.
Retire your way, today.
I can’t remember exactly what the actors who shill for the reverse mortgage companies say in the TV ads but they imply free money, they imply not needing to pay monthly mortgage costs ever again, they imply federal guarantees and a host of other things to sell the loans.
One of my nieces asked me if “Grandma could get a reverse mortgage for the house…” I told her “not on a commercial property, it has to be a one or two family house that was the primary residence”. The building in question was a 6-unit apartment building.
PurpleGirl
@the Conster: Don’t forget Henry Winkler.
Yutsano
If there is profit to be made off anyone, it will get made. That is the new American business ethos. Any other sense of ethics or morality is just hippie wishful thinking.
This seems related. And it’s not kind at all to Dubya.
Genine
My ex mother-in-law is a victim of this. When she first told me about it, it didn’t make any sense. How can she pay no money? Where is the profit for the company? The reverse mortgage she was telling me about didn’t make sense. Something wasn’t adding up. And the sales person was very aggressive.
And now, two years later, she’s losing her house.
I wish I could be surprise by things like this anymore but I’m not.
What’s disturbing about this situation, the election and all the things that have been happening the last few decades is the normalization of reprehensible behavior.
jwb
@Redshift: The false equivalency may well have been the price she had to pay to get the Times to run the piece.
Arclite
Won’t the free markets solve this? After enough seniors get evicted and their houses stolen, those companies will just go out of business, right? Why do you hate business John Cole?
/Troll
Sly
How could a stand-up guy like Fred Thompson possibly steer people wrong?
You think they care? We’re talking about an entire class of economic actors that work off the principles of Other People’s Money, There’s Always a Bigger Sucker, and IBG YBG. Their entire existence is predicated on fucking as many people over as possible before they cash out and split. The fundamental flaw in the casino analogy is that casino’s, even the ones run by the mafia decades ago, are far more responsible institutions and more careful stewards of their customers’ interests.
The answer is “more.”
Money isn’t a means of remedying material need or even want for these assholes. It’s just a way to keep score with other assholes.
MattF
According to the article, the big banks have moved out of the reverse mortgage business, ‘mortgage brokers’– e.g., former subprime lenders and Fred Thompson, have moved in, and the default rate is nearly 10%. So many red flags, it’s like we’re back in USSR.
Linda Featheringill
@Schlemizel:
We’ll be serfs.
But I agree with your point.
lahru
The 1% view us citizens as prey.
The beast needs to eat.
Greed is what fills their belly’s.
Just like global warming, live 4 2day.
lahru
The 1% view us citizens as prey.
The beast needs to eat.
Greed is what fills their belly’s.
Just like global warming, live 4 2day.
BGinCHI
@Arclite: This is a great example of why a poorly (or unregulated) market is not a market.
For any market to work, there has to be a guaranteeing agency outside it (like a government or a regulator, or both obviously).
There is a reason capitalism and the nation state emerged together. If a market is so “free” that it has no rules which structure, organize, and police it, it’s not going to function.
See the jungle, law of.
MikeJ
@Genine:
In effect you’re selling your house now but you get to live in it until you die.
jrg
@Genine: A reverse mortgage is a way to trade the equity in your house for an annuity. Basically, what MikeJ said.
Citizen Alan
@MikeJ:
Or not. I believe the way it works is that if you have the temerity to live longer than the actuarial tables say you should, you either pay the bank back the difference or move out of your home.
Elizabelle
@Genine:
This.
It’s “Defining Deviancy Down” for the financial sector.
And people aren’t paying enough attention.
MattF
@Citizen Alan: In fact, reverse mortgages are federally insured, so if the borrower lives long enough to make the lender take a loss, it’s We The People who pay the difference. If this comes as a surprise to you, you’re probably in for a few more surprises.
jheartney
Once upon a time the equity someone built over a lifetime of mortgage payments could be passed down to children. These days, if you don’t burn it up in nursing home expenses, you cede it all to some shysters with a reverse mortgage.
Just the 1% making double sure they don’t leave any money on the table.
Villago Delenda Est
These parasite vermin need to be eradicated.
That is all.
Paul
@zmullls:
The election currently up for graps. As long as the 47% and 99% keep voting for the party that is against regulations, against big government, who else do you suggest we blame? If you don’t want regulations, that’s fine. But don’t blame others for the consequences. Take responsibility for your vote.
The only way Romney gets elected is with support from the 99%.
MikeJ
@Citizen Alan: You wouldn’t want to inconvenience your betters, would you?
lee
My father in law got a reverse mortgage and it actually worked out ok.
The reason it did is a regulation that limited the amount of the loan. This is is in Texas and surprisingly I think it was a state law.
He was able to do some remodeling on the house and had some cash left over. As he was about to move into assisted living he took the final amount left on the loan and then sold the house and even ended up with a bit of cash from that.
So as others have pointed out, and when the market is well regulated it works well
Mark S.
@Redshift:
I agree, but this sentence really annoyed me:
I hardly think a country with a huge slave population can be considered really egalitarian, and this assertion is supported by a long quote from Thomas Jefferson, one of the richest mother fuckers of his day. It’s kind of like saying the US of the 2010’s is one of the most egalitarian societies in the world, and buttressing the assertion with a quote from Mitt Romney.
Ruckus
@Yutsano:
That video is great.
I have relatives that are telling me that getting a job right now, with me in my 60s is all in my head. If I would just be positive I can get a job. Any job, all it takes is a positive attitude. I have called bullshit but that of course is not getting me anywhere with them.
Chris
Watching a Naomi Klein video for class (first time I listen to her, actually) that touches on what drives people like this. She mentions greed and overconfidence, but mostly credits the fact that they’re told again and again that they’re “gifted, chosen, born to rule.” Sounds pretty true to me.
(It also explains why they have an absolute fucking mental breakdown every time anyone makes even the mildest criticism of the way the 1% work – comparing the threat of a slight tax increase to Hitler’s invasion of Poland, long and rambling explanations on how the rest of us just don’t UNDERSTAND how they hold society together, predicting plagues of locusts and rivers turning to blood if anything so much as nicks their “confidence.” When you spend your whole life being showered in nothing but worship, even a backhanded compliment looks like a guillotine).
Schlemizel
@Linda Featheringill:
I’m not convinced. We are a nation of gun owners and we want easy answers. If it gets too bad I would not be surprised to see places being shot up.
Its going to take a lot but they are pushing for it. I remember reading about a guy who had worked his whole life as a linesman in North Dakota. His company was bought by Enron. He bought their BS lock stock & barrel. When he retired he had $1million in Enron stock in his IRA. Then he was 70 and his IRA was worth 0. I have to admit if that were me I would be getting free room and board from the state and Kenny boy would not have had a heart attack.
RyMaN600
They act just like junkies.
The 2008 crash was a near-fatal OD, with the bailout as their life saving injection of Narcan. But they can’t help themselves, and they’ve gone right back to chasing that high.
They know full well that it all end the same way it almost did 4 years ago, but they just don’t care.
Chris
@Mark S.:
Yeah, I picked up on that too. Something about Thomas Jefferson, of all people, rambling on about the lack of class inequality in America just makes you want to throttle the speaker.
JGabriel
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Koch Bros. & Koch Industries COO David Robertson join David Siegel and Arthur Allen in threatening their employees if President Obama wins re-election.
David Robertson, via Mike Elk @ In These Times:
Right. Stay classy, asshole.
.
Schlemizel
BTW – they have these things in Europe. They are heavily regulated & they work wonders.
Its sort of like an annuity. The bank gives you X dollars based on your age & the suspected value of your home when you leave it. You can take that as a lump or as monthly payments. When you die or go into a nursing home the bank owns your home. The risk for the bank is the same as the risk of a life insurance policy. There a story of a woman who lived to 110 or so & the bank was never going to make their money back but I bet there are also some who croak 2 months after signing & the bank does quiet nicely. Like insurance you need a broad base of customers & a good actuarial.
The story is that these things don’t have to be scams. Only in this Gaultian paradise do they become that.
Corner Stone
Of all the world, in fact. Witness the removal of rent control in Portugal. As part of an agreement for the banksters there to get a piece of the bailout.
JGabriel
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Chris:
If rich conservatives are gonna compare us to Hitler anyway, why don’t we do a Hansel & Gretel and just push’em in the ovens?
May as well be hung for a wolf as lamb.
.
Genine
@MikeJ: @jrg:
Yeah, that’s what I thought. However, the salesperson told her that her family would have the option of keeping the house. And I said that makes sense, they would have to pay for it, though. But she told me that was not the case. And she said she wouldn’t have to pay anything- which turned out not to be true.
What you guys are saying makes sense. But what my ex MIL said was different and very shady.
JGabriel
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Genine:
I blame Ayn Rand. Rand made reprehensible behavior heroic to the reprehensible.
.
PeakVT
In other economic news-that-isn’t-really-news, state taxes are regressive (handy chart at the bottom).
Redshift
@JGabriel: The further irony being that if he’d written that about the Bush Administration, there would be considerably more truth to it.
Corner Stone
Alex Smith is sucking hard core today.
In the National Football League.
Which is a collective of semi-competitive clubs and organizations that regularly face each other on green fields. And play fucking football.
JGabriel
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And now the top banner ad on my Balloon Juice front page is for a company selling Reverse Mortgages.
Ironic, haina?
.
burnspbesq
OT, but since there’s no NFL thread today …
Umm, where did all the 49er fans go?
BGinCHI
@burnspbesq: You watch the Germany-Ireland match?
Ouch.
Mr Stagger Lee
@RyMaN600: There was a great this Modern World Cartoon about that, with The Invisble Hand of the Market Man as junkie addicted to deregulation with George W, Bush as a dealer offering the hand to score some more, very funny.
burnspbesq
@JGabriel:
“Runaway inflation?” In a recession that is persistent because of insufficient aggregate demand?
/facepalm
raven
@burnspbesq: They ain’t at the Stick from the noise when Cruz catches a pass!
Roger Moore
@JGabriel:
I think that’s what he really means.
burnspbesq
@BGinCHI:
Missed it, thank god. If they can’t bounce back against the Faroe Islands, then Trap has to go. And I say that as someone who is horrified by the thought of Mick McCarthy coming back. Ireland would be better off with Steve Sampson than Mick McCarthy.
ETA: Depending on what happens on Tuesday, Klinsmann could be available.
Brother Shotgun of Sweet Reason
@JGabriel:
More projection. Isn’t this what we do with the oil and defense industries now?
Yutsano
@burnspbesq: Heh. You act like they should be consistent or something.
BGinCHI
@burnspbesq: As Roy Keane said about McCarthy, “…and he’s not even fookin Irish!”
Ireland plays too slowly. They have some quality players but they just aren’t going to transcend.
burnspbesq
@Yutsano:
Consistency? I’d settle for an IQ somewhere north of 12.
Yutsano
@burnspbesq: That’s one of the things about being born on third base and thinking you hit a triple: brains are not required. And terrorizing your serfs is part of the perk of being a baron is it not?
catclub
@Sly: “are far more responsible institutions and more careful stewards of their customers’ interests.”
The Union Pension funds that gave sweetheart loans to mobsters still paid the union pensioners. UNlike the compnay pension funds that just went bankrupt and pawned their responsibility off on the Fed. Also unlike Bernie Madoff.
catclub
@Brother Shotgun of Sweet Reason: The fookin’ President of Halliburton was the VP of the US, fer chrissakes.
Genine
@Elizabelle:
I think people aren’t paying attention because it’s been happening over decades. Since Reagan, the tone has changed. Gordon Gekko was supposed to be a cautionary tale, now he’s a folk hero. And the fight over health-care reform was truly despicable.
I think it’s a frog placed in a slow-boiling pot of water scenario. In this case, the frog is our sense of community and basic decency.
Roger Moore
@Yutsano:
I think brains are actually discouraged. If you actually stop to think about where your money comes from, you might do something radical like give it to charity instead of conserving it for the next generation. At the very least, people with brains are a lot less likely to believe they got to third base on their own.
Chris
@Genine:
Childhood memories related to this: in the 1950s and 1960s French-language comics I inherited from my mother, there’s a general trend (even in spy fiction, military fiction, etc) away from any bad guys with ideology or nationality, and towards people purely motivated by greed (criminals, crooked businessmen, etc). Reason being that there was a culture war on, a censorship ban on anything political, and “greed is bad and those driven by it are wrong” was the only message the authors could think of that was uncontroversial and basic enough for even a backwards-ass Catholic reactionary and a godless Left-wing moral relativist to agree on.
Fifty years later, “greed is good” is bipartisan consensus in the entire West and most of the world.
Sad panda.
Chris
@Genine:
Ironically, this is exactly the analogy they use to describe “creeping socialism,” the growth of the federal government, etc.
(Unless of course we’re talking about the power of military and security agencies. In which case it’s nothing to worry about, because ::big used car salesman grin:: it’s okay, you can trust them! And just ignore the fact that they take their orders from those same sleazy politicians that you’re supposed to not trust…)
Mr Stagger Lee
@burnspbesq: Happy that the Browns won, so I will wear my Browns Swag, though it will probably be the only time this season, on the other hand I am getting sick of the weak sauce Seattle offense despite they just scored. Dump Darryl Bevel!
srv
ok,explain it to me like I’m five.
How do you default on a reverse mortgage?
And the taking a lump sum and then not being able to pay property taxes. How were they going to pay taxes without the reverse mortgage? Did the valuation go up? Why would that happen in this market?
sharl
@Genine: The irony of that analogy is that frogs do NOT behave that way, but people often do, in the figurative sense in which it is usually meant (I’m not considering people who get drunk and fall asleep in their hot tubs).
Someone with the style and skill of Gary Larson, the artist behind the much-missed Far Side cartoons, could show a classroom of frogs in school, with the Teacher-Frog showing a picture of a smiling human in a water-filled pot over a flame, and saying “Students, do not behave as the Giant Bipeds do. Jump out of the water before it gets too hot!”
Roger Moore
@Chris:
I don’t think it’s consensus in the broader community. It’s just that greed has the money to spend on very good PR, so it gets a lot of good press.
PeakVT
@sharl: Reminds me of one of my favorite Toles cartoons.
Ruckus
@RyMaN600:
They know full well that it all end the same way it almost did 4 years ago, but they just don’t care.
Why should they care, what has it cost them not to? The answer is of course, nothing. Maybe they needed to hire an extra lawyer or two, so what, that’s just the cost of doing business and is small potatoes.
burnspbesq
Giants’ offensive line is down’ stuff.
PsiFighter37
@JGabriel: Is it Fred Thompson speaking to you in the soothing voice of a semi-seasoned Hollywood C-list veteran?
Judas Escargot, Acerbic Prophet of the Mighty Potato God
Keep in mind that some non-zero percentage of these seniors assumed that they were just screwing their heirs, at no cost to themselves.
Still… needs regulation.
sharl
@PeakVT: Haha, excellent. Sorry I missed that one when it came out.
Yutsano
@burnspbesq: Go Seahacks. :)
burnspbesq
Holy crap. Seahawks?
James E. Powell
Derisive cheering as A-Rod gets a single with two outs in the 9th, Yankees down 3-0.
trollhattan
@burnspbesq:
Some coronary material right there. 14 points in the 4th, win by 1? Too bad for me it wasn’t on my f#$king teebee machine.
Thursday: SF.
KoolEarl
Good grief horrid Iggles loss. The end of the Reid and Vick eras can not come fast enough
handy
So looks like Eli and the Gints are the new Aikman and Cowboys to the 9ers. That stung.
Corner Stone
As a Wise Man once said here,
“Man, are we slipping on the football open threads”
burnspbesq
Yankees are in a world of trouble. They have to beat Verlander twice to win the ALCS.
handy
@burnspbesq:
Too bad. So sad.
Brother Shotgun of Sweet Reason
@handy: My sentiments eggzactly. Boo fuckin’ hoo for the Yanks.
Spike
@James E. Powell: A Bronx cheer, both literally and figuratively. Sorry I missed it.
Spike
@James E. Powell: A Bronx cheer, both literally and figuratively. Sorry I missed it.
Todd
Nothing here that can’t be solved by running a few 9 mm rounds through the cerebellums of CEOs, bankers, their spouses, their parents, their friends and their spawn..
HRA
I did not get to read all the comments. This was the first chance to check the blog. I wanted to tell you about my short lived thought about the reverse mortgage.
I would say this happened when it was first advertised. One daughter asked if I would be interested since the house did need some repair – check a lot of repair. I even had an in-law who worked at a bank and she was encouraging me, too.
1. Nobody (especially banks and loan companies) is going to give you money without making a profit.
2. I struggled for years to pay off the mortgage.
3. I had to fight the liens my ex-husband had attached to the house in court for years.
That was it. I have been improving it slowly and it still belongs to me.
Yutsano
@trollhattan: The 49ers will take lots of luck. And if there is one thing the Seahacks don’t have, it’s luck.
FlipYrWhig
When these people lose their houses, I bet huge numbers of them will blame Obama. Sometimes I start to get tired of trying to help people who then turn around and tear down the things I care about.
Gian
@JGabriel:
bad week for oven jokes:
Worker cooked to death at Bumble Bee seafood plant in California
By NBC News staff
California workplace safety officials are investigating how a worker at a Bumble Bee Foods seafood plant wound up being cooked to death in an industrial oven.
Follow @NBCNewsUS
The accident happened Thursday morning at the Bumble Bee Foods factory in Santa Fe Springs, Calif., KTLA.com reported.
Police and fire personnel, responding to a 911 call from the business, found a worker dead inside a cooking device called a “steamer machine,” according to KTLA.
The victim was identified as Jose Malena, 62, an employee at the factory for more than six years.
An initial investigation indicated that Malena “was fatally injured when he was cooked in an oven,” California Division of Occupational Safety and Health spokeswoman Erika Monterroza told the Whittier Daily News.
Cal-OSHA is trying to determine how the man wound up in the oven and whether there were any workplace safety regulatory violations.
“The entire Bumble Bee Foods family is saddened by the tragic loss of our colleague, and our thoughts and prayers are with the Malena family,” Bumble Bee Foods spokesman Pat Menke said in a statement to KTLA.
Operations at the plant were suspended until Monday.