Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
Reverse mortgage abuses. Regulators are finding new instances of abuses in the long-troubled reverse mortgage market, The New York Times says, forcing seniors out of their homes as baby boomers hit retirement. A number of banks, including Bank of America, have already gotten out of the business. Still, default rates are at record highs.
Fed governor pushes limits. Federal Reserve governor Daniel Tarullo said in a speech at the University of Pennsylvania's law school that the Fed needs to do more to limit the too-big-to-fail perception that is artificially backstopping the country's biggest banks, which a Bloomberg column says marks a change of mindset in the central bank.
Citigroup earnings. Citigroup emerged with a half-billion-dollar profit that surprised analysts in a noisy quarter marked by tax gains, higher bond-trading revenue and a $3 billion writedown on Smith Barney, Bloomberg reports. Wells Fargo and JPMorgan Chase kicked off earnings season Friday, and Bank of America will report results Wednesday morning.
Monday, October 15, 2012
Reverse mortgage default rates at record highs
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2 comments:
Reverse mortgages often have very high initial fees, such as those for appraisal of the home, credit checks, and insurance, as well as closing costs, origination costs and service charges. So if you die or move out of the home before you have drawn much on the mortgage, you wind up paying a very high cost for what will have turned out to be a short-term loan.
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It’s just that the sellers of these products do not adhere to any standard for what is suitable for any potential borrower and who is not a suitable candidate. Consequently, some borrowers are in serious trouble as a result of making the choice to get a reverse mortgage. Also, they are sometimes talked into them by abusive family members who want to get their hands on the cash.
Reverse Mortgage
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