April 7, 2016
Protecting Seniors’ Home Equity
The Consumer Financial Protection Bureau has issued and Advisory and Report for Financial Institutions on Preventing Elder Financial Abuse. The Report defines elder financial exploitation as
the illegal or improper use of an older person’s funds, property or assets. Studies suggest that financial exploitation is the most common form of elder abuse and yet only a small fraction of incidents are reported. Estimates of annual losses range from $2.9 billion to $36.48 billion. Perpetrators who target older consumers include, among others, family members, caregivers, scam artists, financial advisers, home repair contractors, and fiduciaries (such as agents under power of attorney and guardians of property).
Older people are attractive targets because they may have accumulated assets or equity in their homes and usually have a regular source of income such as Social Security or a pension. In 2011, the net worth of households headed by a consumer age 65 and older was approximately $17.2 trillion, and the median net worth was $170,500. These consumers may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, and/or the recent loss of a partner, family member, or friend.
Cognitive impairment is a key factor in why older adults are targeted and why perpetrators succeed in victimizing them. Even mild cognitive impairment (MCI) can significantly impact the capacity of older people to manage their finances and to judge whether something is a scam or a fraud. Mild cognitive impairment is an intermediate stage between the expected cognitive decline of normal aging and the more serious decline of dementia. Studies indicate that 22 percent of Americans over age 70 have MCI and about one third of Americans age 85 and over have Alzheimer’s disease. (8-9, footnotes omitted)
The CFPB recommends that financial institutions consider
- training staff to recognize abuse;
- using fraud detection technologies;
- offering age-friendly services; and
- reporting suspicious activities to authorities.
These recommendations are a step in the right direction, although they offer no panacea. As the Report acknowledges, even if financial institutions report suspicious activities to government authorities, there is no guarantee that they will be acted on. But if these recommendations are publicized, they may deter some predators who think that they can act freely within the fog of their victims’ cognitive decline. And a few well-publicized prosecutions of relatives, caregivers and advisors who violate the trust that was placed in them would help to spread the message that ripping off senior citizens is no easy path to riches.
April 7, 2016 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Roundup
- The Brookings Institution released a report finding that concentrated poverty has increased since the Great Recession across the United States, from 5.2 million to 14 million living in extremely poor neighborhoods.
- The National Housing Conference and Children’s HealthWatch released a report finding that homelessness and unstable housing can harm infants and young children.
April 7, 2016 | Permalink | No Comments
April 6, 2016
All The Single Ladies . . . Buy Houses
Realtor.com quote me in More Single Women Hunt for Homes, Not Husbands. It reads, in part,
Alayna Tagariello Francis had always assumed she’d marry first, then buy a home. But when she found herself footloose, free, and definably single in her early 30s, she decided to make a clean break from tradition: She started home shopping for one.
“After dating for a long time in New York City, I really didn’t know if I was going to meet anyone,” she says. “I didn’t want to keep throwing away money on rent or fail to have an investment because I was waiting to get married.”
So in 2006, Francis bought a one-bedroom in Manhattan for $400,000—and was surprised by how good it felt to accomplish this milestone without help.
“To buy a home without a husband or boyfriend wasn’t my plan,” she says, “but it gave me an immense sense of pride.”
It’s no secret that both men and women are tying the knot later in life. A generation ago, statistics from the Census Bureau showed that men and women rushed to the altar in their early 20s; now, the median age for a first-time marriage has crept into the late 20s—and that’s if they marry at all.
The surprise is that even though today’s women still make 21% less than men, more single women than men are now choosing to charge ahead and invest in a home of their own. It’s changing the face of homeownership in America.
And while that decision to buy can help build wealth and ensure financial stability, plenty of women are finding the road from renter to owner is filled with unforeseen obstacles—and plenty of soul-searching.
* * *
Why women shouldn’t wait
But then again, few of us have fully operational Ouija boards we can pull out of storage to pinpoint exactly when our ideal significant other will arrive on the scene. So putting house hunting on pause is something fewer women are willing to do.
“Women today don’t sit around and wait for Prince Charming,” says Wendy Flynn, a Realtor® in College Station, TX, who has helped numerous single women buy homes. After all, Flynn points out, “The time frame for meeting your dream man, getting married, and having kids—well, that’s a pretty long timeline.” So even if you do meet The One a day after closing on your home, “you could sell your home in a few years and still make a profit—or at the worst, probably break even.” If you buy right, that is.
That said, women who do want to marry and have kids as soon as possible will want to eye their potential home purchase with that in mind. Is the new place big enough for a family? Or, if you think you’ll sell and move into a larger place once you’re hitched, how easy will it be to sell your original home—or are you allowed to rent it out?
And if you marry or a partner moves in, make sure to consult a lawyer if you want your partner to share homeownership along with you.
“You definitely should not assume that your spouse’s home is transferred automatically to you once you get married,” says David Reiss, an urban law professor at Brooklyn Law School.
April 6, 2016 | Permalink | No Comments
Wednesday’s Academic Roundup
- Social Networks and Housing Markets, Michael Bailey, Ruiqing Cao, Theresa Kuchler & Johannes Stroebel.
- Externalities of Public Housing: The Effect of Public Housing Demolitions on Local Crime, Danielle H. Sandler, US Census Bureau Center for Economic Studies Paper No. CES-WP-16-16.
- Housing Market Effects of Appraising Below Contract, Hamilton B. Fout & Vincent W. Yao.
- Distributional Implications of Government Guarantees in Mortgage Markets, Pedro Gete & Franco Zecchetto.
- Is California More Energy Efficient than the Rest of the Nation? Evidence from Commercial Real Estate, Matthew E. Kahn, Nils Kok & Peng Liu, USC-INET Research Paper No. 16-08.
- Housing, Housing Policy, and Housing Finance: Time for a Re-Assessment, Lawrence J. White, Milken Institute Review, Forthcoming.
- Green Marketing: A Study of Consumer Purchase Behaviour for Green Homes, Chitral Patel & Pawan K. Chugan, New Age Ecosystem for Empowering Trade, Industry and Society, Eds., Pawan K. Chugan, Deepak Srivastava, Nikunj Patel and Nirmal C. Soni, Excel India Publishers, New Delhi, for Institute of Management, Nirma University, Ahmedabad India. Jan. 2016, ISBN: 978-93-85777-08-0, pp. 254-268.
April 6, 2016 | Permalink | No Comments
Brooklyn: Sky’s the Limit
Brooklyn Law School’s Center for Urban Business Entrepreneurship is hosting a Networking Reception with Panel Discussion to Follow on April 12th from 6 to 8:30 pm. The panel discussion is entitled, Brooklyn: Sky’s the Limit:
The Borough of brownstones and warehouses continues to emerge as a global powerhouse with a skyline that may soon rival that of the Manhattan. From the world’s largest roof farm to drone design and launch, to dynamic architectural environments in which Brooklyners live, work, and play, the Borough is taking its place as one of the most innovative and entrepreneurial urban areas in the world. The numerous ventures driving these and other pioneering efforts in Brooklyn are raising novel legal, policy, business, and societal issues that generate opportunities for growth along with some growing pains.
Join Brooklyn Law School and the Center for Urban Business Entrepreneurship (CUBE) for a lively panel discussion that explores these phenomena and their impact on the lives, environment, and flourishing businesses of the Borough and its growing and diverse population.
Introductory Comments
Kathleen D. Warner ’92, Executive Vice President and Managing Director, NYC Economic Development Corporation’s Center for Economic Transformation
Panelists
David Ehrenberg, The Brooklyn Navy Yard – President and CEO
Jonathan Marvel, Marvel Architects – Principal
Ron Shiffman, Pratt Institute for Community and Environment Development – Co-founder
Todd Sigaty, SHoP Architects – Director of Legal Affairs and Sotheby’s Institute of Art – Lecturer
Brian Streem, Aerobo drone developers – Co-founder and CEO
Lee Wellington ’13, Urban Manufacturing Alliance, Executive Director
Moderator
Brian August, 110 Stories – Founder and CEO
This event will be preceded (from 4 to 6) by the CUBE Shark Tank, also known as the CUBE Innovators Competition:
Come experience the Third Annual CUBE Innovators Competition, where Brooklyn Law School students will compete for a small amount of funding for projects and ventures that they will pitch to the audience and an impressive panel of judges. This event is being sponsored by CUBE and Levi & Korsinsky, LLP.
Judges
Tom Chernaik, CEO, Command Post
Mary Juetten, CEO and Founder, Traklight
Eduard Korsinsky ’95, Founding Partner, Levi & Korsinsky, LLP
Charlie O’Donnell, Partner and Founder, Brooklyn Bridge Venture
Basha Rubin, CEO and Founder, Priori Legal
Marshall Silverman ‘74, President and CEO, Silverman Studio Group
Learn more about CUBE.
April 6, 2016 | Permalink | No Comments
April 5, 2016
Creative Credit Union Mortgages
DepositAccounts.com quoted me in Types of Institutions in the U.S. Banking System – Credit Unions. It reads, in part,
What You Need to Know About Credit Unions
For more than 100 years, credit unions have been providing financial services to their members. Forget about what you thought you knew about credit unions. Long gone are the days when credit unions were seemingly only a “bank” for government employees. Today some 100 million Americans are member-owners of 6,900 credit unions and credit unions have more than $1 trillion in assets.
The Credit Union National Association (CUNA) defines a credit union as a non-for-profit, member-owned financial cooperative, democratically managed by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.
Simply put — credits unions are about their members, not profits.
* * *
How are credit unions different from banks?
“They are structured very differently. Credit unions don’t issue stock or pay dividends to outside shareholders, so they are not beholden to outside third party interests,” says Steve Rick, chief economist of CUNA Mutual Group, an insurer and maker of financial productions within credit unions.
Each person who holds an account is a member, and each member has one vote, “rather than the voices of only the powerful few stockholders heard at for-profit banks. And all earnings go straight back to members in the form of favorable interest rates and lower fees that other for-profit institutions can’t beat,” he adds.
Banks are governed by paid shareholders and voting rights depend on the number of shares owned. Earnings go to outside bond and stockholders in the form of dividends.
As cooperatives, credit unions are part of a broader cooperative community that shares philosophies around benefiting their member owners. One of the core missions of the credit union system is to educate its members on financial issues to ensure their financial health.
“It’s worth noting that credit unions can offer creative types of mortgages that should be explored by first-time and experienced homebuyers alike. The PenFed Credit Union, along with some other credit unions, has a 5/5 ARM that adjusts every five years. A product like this combines aspects of a fixed rate mortgage (fewer, but not the fewest) surprises about payment sizes, with aspects of an ARM (lower, but not the lowest) interest rates,” says David Reiss, a Brooklyn Law School professor specializing in real estate.
April 5, 2016 | Permalink | No Comments
Tuesday’s Regulatory & Legislative Roundup
- Mayor Martin Walsh of Boston announced $28 million in funding for the creation maintenance and preservation of affordable housing in Boston.
- Governor Cuomo signed $15 minimum-wage law and 12-week paid family leave policy into law this week.
April 5, 2016 | Permalink | No Comments
