| A Primer On Reverse Mortgages
Economists report that as housing prices have skyrocketed over the past several years, the amount of money that households are saving through 401(k) plans and FDIC insured savings accounts has fallen. For many people approaching retirement age that means they may be "equity rich" and "cash poor" at the same time. It is not unusual today to find people living in $1 million homes almost entirely dependent on social security to get by. A 1994 Advisory Council on Social Security trends and issues concluded that reverse mortgages could provide an additional source of income for seniors although at the time housing prices were not high enough to make this a meaningful source. Well, things have changed. A reverse mortgage is still a loan with your house as the collateral, but it is entirely different from the kind of mortgage you got when you bought your first house.
A 'perfect storm' swamps Lower Hudson borrowers
To see what happens when a slowing housing market meets a high-risk mortgage market, just stop by the lobby of the Westchester County Courthouse nearly any day of the week. There, with little fanfare and scant notice from the passing crowds, homeowner misfortune is auctioned off, one over-mortgaged house at a time. Luckily, the Lower Hudson Valley is not yet Ohio, or Mississippi, or any of the other crashing real estate markets, which have pushed national foreclosure rates to their highest level in the 37 years that the Mortgage Bankers Association has been keeping records. High housing demand in New York City has made the landing more bearable for most homeowners in Westchester, Rockland and Putnam counties. Nonetheless, foreclosure rates are increasing, too. RealtyTrac.com, a national online foreclosure listing service, reports a continuing rise in the number of homes entering foreclosure in Westchester, Putnam and Rockland counties.
Broker Indicted After Collecting Advance Fees
OWINGS MILLS, MD - A federal grand jury has indicted Robin Neil Snyder, age 56, of Reisterstown, Maryland, and Mortgage Bankers, Ltd. for wire fraud and money laundering arising from a scheme to defraud loan applicants, prosecutors said. According to the 17-count indictment, Snyder, a licensed mortgage broker, owned and operated Mortgage Bankers, Ltd., originally located in Baltimore and relocated to Owings Mills, Maryland in 2005. From about March 2002 to January 2006, Snyder used an internet website (http://www.refinancecash.com) to advertise and solicit customers for his lending businesses, and promote Mortgage Bankers as a commercial lender capable of providing “difficult" or “impossible" loans anywhere in the United States in amounts up to $300 million. Snyder had prospective commercial borrowers mail and fax to Mortgage Bankers business plans, appraisals, tax returns and insurance information in support of the borrowers' loan applications.
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