saddening, another victim of greedy number fudgers

The sidebar in the story says "Consumer Reports.org - Member sign-in - You have entered an invalid username or password."

I suspect it's related to the fact that the "Remember me" tickbox on CR.org has never worked correctly for me.

It doesn't add up....did he get money back on the deal?

This is heartbreaking. Even without the ARM he still would be 92 years old still paying the Mortgage on a house he's lived in for 40 years... I can't imagine how he got here, how he didn't own this house free and clear 25 years ago...

Why does a 92-year-old have a mortgage? What exactly have you been doing the past 92 years to get in this situation?

"When his daughter looked at his mortgage papers, she noticed that his income was stated as $4,480 a month. It's actually more like $1,400."

And the scammy agent that generated the paperwork will just say that "Mr. Frontz said it was this."

They mention his wife passed away--it could have been refinanced sensibly at a fixed rate for medical bills or a funeral service (those things are SO expensive). You never know.

Whatever his circumstances, this poor guy was absolutely defrauded by a predatory lender. The proof is in the paperwork that claims he made four times his actual salary. Whoever drew up those papers and originated the loan should be hauled into court. There has got to be a way to track who received a commission on the origination.

We're in this mess partially because of people who over leveraged themselves, but also because of greedy loanshark bastards who pray on the elderly, single mothers and minorities. There are a lot of people out there caught in this mess who were trying to do the right thing and make smart decisions--but they ended up like this because they trusted professionals to act ethically and follow the law.

@kwsventures: What the hell does it matter? The man was conned into a mortgage so scammy it's actually illegal in many states. Stop blaming the victim.

This is just plain sick, why the govt. needs to be involved though is beyond me... strikes me as a simple LEGAL issue that the mob I mean mortgage industry just needs to be held to task for.

And I would fully support a way to go back to these (&@)#&)@# people who took advantage and earned significant bonuses on people like this to court forcing them to pay back the money and in turn suffer the consequences of being caught in a criminal act.

BAH... this just infuriates me I find myself all over the place.

@kwsventures:

It's highly possible that he and his wife refinanced when she was still alive. We don't know. You're questioning a fact that is irrelevant to the story.

By signing papers which usually ask one to certify that "the above information is true an complete" and accepting the loan, there is a case that Frontz was actually the one committing fraud by misstating his actual income.

A contract requires an offer, consideration, and acceptance. All of these requirements were met. I don't know where your claims of illegal activity are coming from.

Sure, its probably a deal I would have walked away from after clearly seeing the altered terms and practices of this particular broker. Desperate people sometimes do regrettable things, I have compassion for Fronz, but he has to face the consequences of his actions.

Perhaps the best take away from all of this is "caveat emptor."

Many states have laws against taking advantage of the elderly. Even though the paper work may be in order and legal the fact that he was so old and might not have understood should have come into play. The agent who did this deal should be on the hook for any lost money by all not just his fees or in jail.

@buzzybee:

This is also why they have underwriters at mortgage companies. Someone somewhere saw his income and didn't verify it and pushed it through, which is also illegal.
It could be passed as fraud on his part, but on his side is the fact that people don't generally commit fraud unless it does them some good. Doesn't sound like he was in a desperate situation, more like he got a call and felt "hey, why not save $300 a month". This man would not have gotten a loan that was twice his original income.
So fraud could be said against him, but it's so obviously not the case.

@drrew: probably not - the closing costs were probably 4x the norm & they probably stuck him in a double-digit loan.

@gparlett: it's not atypical for retirees to use mortgages as a method to make large purchases. once your income drops, it's much easier to finance a car, home repairs, medical bills, etc. over 15-20 years vs. 5.

& there's not anything inherently wrong with this approach - a home is as much a part of your retirement as a pension or a stock plan or an IRA.

OT but.... That lovely man is perhaps the only overweight person in his/her 90s I have ever seen. Good genes?

I hope he lives another 10 years but wish it could be in his much-loved home.

So many stories out there similar to this. When is the goverment going to go after these A-holes in the mortgage, real-estate, banking industries who outright lied too and cheated so many people so they could make a commission? Don't tell me they did nothing illegal, I'm sure the goverment could find a way to prosecute if they wanted to.

This is imprudence - how does a 92 year old get suckered so easily? He should have a clue after NINE DECADES that money lenders are not your friends. He's lived through world wars and depressions, plus the 1970s.

I was expecting more sympathetic sob stories - medical bills, sick kids, etc. Maybe those are coming.

This is not a good advertisement for consumer reports - if they're doing the liberal news anecdote thing, why pay for it when the NY Times will give it to you for free?

sorry, but blame goes to both the lender AND the borrower.

1. His income stated was 4 times higher than it actually was, yet he had no problem with this when signing the paperwork, if he even reviewed it at all.

2. He had no problem with his loan arrangement when he signed the paperwork, and I'm sure there was some reason behind why he accepted it (probably thought he could refinance in a couple years when his house is worth more, trying to get in on the bubble while it was still inflating).

3. If he didn't read his paperwork, then he didn't do his due diligence.

I know both lenders and borrowers are to blame for the shitstorm that's happened, but I'm not sorry to hear about victims that saw $$$ when refinancing or buying a house WAY more than they can afford and then crying when the party's over.

@kwsventures: Yeah--GET A JOB you damn piker!

@working class Zer0: You may need to arrest some borrowers too, because I'm sure a lot of them had no problem signing paperwork that overstated their income, like the story about the single mom with 3 kids making $50k a year moving into a $300k home.

@mrdeeno:

Thank you. It needed to be said. It seems that greed is the underlying cause is many (not all) of these situations. Greed by the lenders and greed by the borrowers. The bottom line is you, in sound mind, entered into a contract with certain terms and infomation. If you don't agree to said terms or the information is incorrect don't sign the contract.

@econobiker: unfortunately, you're probably right. but what happened to "accountability"? it used to be that an originator had to prove his income was what he stated (even liar loans required some method of proof via occupational income data). then a processor would have to double-check that info. after that, an underwriter would triple-check the same info. 3 different people in 3 different departments had to say "sure, it's entirely plausible that this 92-yr old man is a...construction foreman?!? what a-hole put this application on my desk?!?"

This case makes me wonder what has happened or will happen to the elderly with "reverse mortgages" (the bank "buys" the house from the homeowner). Was this man one of them?

Those with reverse mortgages owned their house free and clear, and the money the bank pays the homeowner is generally used as income to live off. I have to wonder if some homeowners whose bank or mortgage company went belly up are going to be foreclosed, their house seized from under them and evicted.

I wouldn't be surprised if that happened.

This video doesn't make any sense. How can you go from $900 a month payment to an interest only payment of $1700? That means you more than doubled the value of the loan...if that's the case why is that no mention in the video like "oh and they stole $200,000 from me" or "I spend $200,000 on this". I doubt the mortgage company 'just called'. I'm tired of these videos and stories. People were either greedy or ignorant, why should I feel sorry for them now?

@P_Smith:

Actually, wouldn't a reverse mortgage be a godsend in this situation? Because from what I understand, the bank "buys" the house from the owner and pays the owner the mortgage payments.

If the house value was overestimated due to the bubble, and the rate for the reverse mortgage (ie rate that the bank is paying to the owner) high, then the bank would be getting screwed by the homeowner since they overpaid for the home.

@xphilter:

Personally, I don't feel sorry for most people out there that got themselves into this situation. I feel some compassion for people being forced to foreclose on a home and GO BACK to renting and struggling without a home, but these people were foreclosed on homes they NEVER SHOULD HAVE BOUGHT in the first place either because the home was WAY more than they could afford or they never should've been able to get a loan at all.

I'm single with no kids and make a very decent living with my full time job and investment real estate, yet i live in a very humble house obtained with a conservative fixed rate loan...i'm living on much less than I can actually afford. And then there are stories of people like single moms with 3 kids making less than 50% of what I make moving into a $300k home, and now I'm supposed to feel "sorry" for her or any of these other people who felt that they needed the instant gratification?

I'm surprised a lot of people in this situation never asked why it was so easy to buy a house way out of their income range or asked why it was so easy to buy a house at all. But I guess putting effort into asking questions and doing your due diligence wouldn't be "easy". All i gotta say is "easy come, easy go".

@mrjimbo19: You seem to be contradicting yourself. You say there should be no government involvement but the matter should be settled by law?

@wastedlife: It's like those people who hate the government, but adore the military, police and fire department.