Elderly Scammed by Mortgage Brokers

If this WSJ article on how mortgage brokers preyed on the elderly doesn't turn your stomach nothing will.

For example, it tells the story of Floy Mae Bryant, 84, who was talked into refinancing six times in less than three years:

Mrs. Bryant's last refinancing was in September 2005, just a month after her previous one. A mortgage broker placed her in a Countrywide Financial Corp. "option ARM," an adjustable-rate mortgage with a monthly payment of $1,545, barely affordable on her $2,310 Social Security and pension income. To make her mortgage payments, she drew on a $39,000 home-equity line of credit that the same broker encouraged her to set up.

One son helped her financially, but he died of cancer in November 2007; five months later, Mrs. Bryant's 65-year-old developmentally disabled son, who lived with her, also died of cancer. Mrs. Bryant missed her March 2008 payment, and Fannie Mae, which had bought the loan from Countrywide, sold her home in foreclosure in April. She moved to a rented trailer 20 miles away, returning two or three times a week to her vacant former home to water the roses.

and of John and Vernice Green, an elderly couple in Sacramento who thought they had signed up for a reverse mortgage, but instead ended up in an ARM that increased their payments from $794 a month to $2,106.

Their story ends on this depressing note:

Amid the continued stress, Mr. Green was hospitalized. He died Feb. 5, 2008, age 83.

In June, Ms. Villegas, 29, was arrested and charged with participating in a scheme to defraud lenders. The criminal complaint alleges that Ms. Villegas made false statements to investigators and that loan applications she arranged gave false occupations and inflated incomes. Ms. Villegas denied wrongdoing, and the case is pending.

Late last June, the servicer agreed to reduce the principal on the Greens' loan and convert it to a fixed rate with 7% interest. Mr. Livingstone called to tell the 80-year-old Mrs. Green the news. He learned she was in the hospital with kidney failure. She died a few days later, on the Fourth of July.

Sadly, not only were their lives ruined, but taxpayers get to pay for the clean-up.