Mortgage Forum

Joel Fraser

I know we are going to sound as "dumb as dirt," but this is what happened to us. We were 63 and 64 years of age when this happened and we were doing great financially. In 2006 my boss at work told me he was now a financial planner and could he and his partner come and talk to my husband and myself regarding switching our investments over to him. We ended up transferring accounts to him from Franklin Templeton and Midland National Life Ins. Looking over the documents from Midland we found that our previous financial planner had forged my name to the document. We were told by my boss and his friend that was illegal and after contacting Midland the annunity was given back with no penalty and we were told that we could/would not pursue the matter any further according to letter from Midland. My husband had to sign a general release letter that released Midland and its agents from any liability. The annunity amounted to $73,000. A few weeks later I told our financial planner/my boss that my husband and myself had someone come to the house because we were interested in doing a Reverse Mortgage. We at that point had a mortgage with CountryWide with balance of $91,000. He asked if his partner and him could come to our house and explain the "bad" things about Reverse Mortgages. His partner then asked us "how would we like to pay off our 2 cars and our new pool and have money to invest. They said we should take the equity out of house, because the bank was getting "free use" of our equity money. We said we would have to think about it. Boss kept bugging me at work and we finally agreed to it. We were told by them that a 3 year A.R.M. would be good for us and not to worry about the interest rate because at the end of 3 years we could redo the loan. We got into a $200,000 A.R.M. with World Savings, a Pick-A-Pay loan option. We paid off 2 cars and pool, then he started bugging me about investing. He said that was the point of the loan to pay off those bills and to invest the rest. We finally ended up giving him $20,500 more to invest and he also told us that the money we weren't using to pay those bills we should put into an account which ended up being a Reserve Fund-A at the rate of $500.00 per month, which he set up for us and, which we did. Regarding the A.R.M. we chose the 1st. option and then month after month the principal kept going up and up. I kept telling our financial planner/boss what was happening and how we were thinking of going back to a 30yr. fixed and he told us not to worry, he was also in an A.R.M and told us the interest rate doesn't matter just to stick with it. He also emailed me telling me that we were supposed to be putting $500.00 a month away into VanKampen and that was about $6000 so really it did not go up that much. I'm not sure what he meant by that. We assumed that the $500.00 a month was a Savings plan account. Nearing the end of 2007 the mortgage had climbed to almost $210,000 and we knew we were getting in too deep, so we ended up going to another mortgage broker and getting a 30year fixed. We paid dearly for the mistakes we had made. We now have a $237,000 mortgage with pre penalty and know we could never sell the house now. The payments are $1574 a month. Buyer beware is something we didn't think about. We are not mortgage or investment saavy, as you can see, and totally trusted him. In September of 2007 we received a letter from the investment firm that he was in stating that he was no longer with them, had not been with them since July 2007. He never bothered to even tell us this when I asked him about the letter we had received. He just stated he was working on being reinstated with FINRA. He asked that we bear with him until he got his license back and when asked he said he was never fired that he had resigned. The same thing happened to his friend the other financial planner. I couldn't understand if he had resigned why his license was taken away. No explanation from him. He was not reinstated with Finra until May, 2008. What I have forgotten to add to this was that he and his friend were both affliated with the mortgage broker who obtained the A.R.M. and as a matter of fact they are both employed by this same firm now, and FINRA lists them as being employed with the firm since 11/2006. But I'm sure they got a kick back for taking advantage of us. I think because of our excellent credit scores of 850 and 810 respectfully, they got greedy and knew they could get more money out of us. Again, buyer beware....don't trust anyone, especially someone who professes to be your friend, looking out for your best interests!! We probably can't do anything about this whole mess, but just wanted other Seniors to beware of friends bearing gifts! They are not your friends, especially if they are your financial planner working with a mortgage broker. We're now 65 and 64 years of age and have no one to turn to anymore.