70% of Seniors Have Been Lured and Trapped into Dangerous Loans

Octogenarian Giuseppa Bagnarol was on her deathbed – the grand matriarch being surrounded by innumerable family members. They had all come to the retreat in Redwood City that Giuseppa had set up. It comprised of an estate of three houses sweeping down a hillside where she led a green life raising chickens. Some of her family members lived with her.

But on the night of her approaching death papers arrived ordering her and her family to clear out. The bank had initiated foreclosure proceedings and all were being thrown out.

There was a burst of emotions as the family pointed out to the critical hour. The sheriff had to be called to bring back order. A day later the old lady breathed her last.

The family members were angry not only because of the inopportune hour of serving the notice but the preceding financial mess that had led to this knock. In the eye of the storm was the peddling of such exotic mortgages for Guiseppa to ink. It was clearly an instance of taking advantage of the seniority of the borrower.

Guiseppa’s daughter Carolina Bagnarol had filed a suit against many lenders who had taken advantage of the advanced years of her mother. The loans pushed her speedily down in to more and more debts with each mortgage until she had reached the point of financial ruin. In the legal suit it is alleged that Guiseppa was repeatedly persuaded to take dangerous loans staking the family property.

In the past few years about 70% of the seniors have been wooed to take new dangerous mortgages according to a survey conducted by AARP. Ultimately it all lead to foreclosures. Senior attorney Jean Constantine Davis of AARP said, “Older people seem to be targeted in part because they own their houses and have owned them for a long time and have equity in their houses.” When Guiseppa Bagnarol signed the papers she was nearly 80 years of age and suffering from the signs of dementia.

Attorney Michael Rooney representing the family said, “This is one of the most egregious cases I’ve ever seen. The terms were so horrible – negative amortization and adjustable rate – no one would believe this loan was good for her.”

The case of Bagnarol is not an isolated one – these were very popular during that time. They were peddled under a bevy of names – Option/ARM and Pick-a-Payment. By it the borrowers could choose a schedule that required minimum payments to be made. The balance was then tagged on to the principal and thus making the original loan heavier and heavier. The borrower was sure to drown when the monthly payments would finally start to catch up with reality.

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