Yearly Archives: 2004

What to Do if Your Mortgage Lender Bails Out on You

Real Estate-Purchases

Recently, as interest rates rose and the number of files on their desks exploded to record levels, some mortgage companies bailed out on clients and failed to close. In two cases I was involved in (both of which are new construction) the mortgage companies literally “forgot” about the client. The loans were not ready to close because no one paid attention to the file for months. The other problem is that some lenders blow the “lock-in” period. The client is left with a lame promise that the mortgage company will do a “free refinance” later to cure the problem.

How can you prevent this? Pick a reputable lender in the first instance; not one from the internet or your brother-in-law who thought he would try out mortgage brokerage. Stay in touch with the lender. If all else fails, file a complaint with the office of banks and real estate. Here is the form to file the complaint:

http://www.bre.state.il.us/CONSUMER/FORMS/c-Form41.pdf

It rarely pays to file a lawsuit against the lender. Attorneys fees are cost prohibitive and your damages are hard to prove.

Truth about Annuities

Elder Law, Estate Planning

Many clients buy annuities. I think it is fair to say that most clients do not understand the annuities and, in many cases, the annuity purchase was an inappropriate choice. In my opininion annuities are appropriate when:

1. The client wants to save more for retirement and already puts the maximum in his or her IRA/401k;

2. The client is in a high tax bracket and wants to reduce taxes;

3. The client won’t need the principal for quite a long time and the annuity makes up a small portion of the client’s total investments.

I have one client who paid no income tax, was 85 years old, had been retired for 20 years and purchased 4 annuities with all of her liquid assets; her only other assets, after the mass annuity purchases, were her condo and a checking account. The annuities were “unsuitable” for her, but were perfect for the annuity salesperson who netted at least $20,000 in commissions.

See the annuity truth web site for some interesting reading on annuities and whether one is right for you