Borrowers

Much of the wealth of millions of baby boomers is tied up in their houses — a sure sign we're going to see a growing demand for reverse mortgages. These mortgages allow older homeowners to drain the equity in their house without having to sell it or make monthly payments. For now, though, these complex loans make up only a tiny percentage of housing loans — and that's a good thing. It gives regulators, the industry and consumer advocates time to bolster borrower protections and education before widespread problems occur.

There is a sharp disconnect between the image and reality of the O'Malley administration's fiscal policies. The image features pension reforms, reduced structural deficits, a rainy day fund, and protection of programs. The reality includes deferred maintenance, transfer of costs to local governments, "Medicaid cuts" that shift costs to hospitals and the privately insured, revenue bond financing for core functions, failure to curb pensions and health benefits, raids on open space and Injured Workers' Insurance Fund revenues, over-reliance on gambling (both literally and within the state's pension funds)

Wells Fargo borrowers potentially eligible for mortgage rate reductions under the national settlement with big banks are being notified this month, Maryland's attorney general said Friday. The lender is mailing out rate-reduction offers in waves, meaning that some borrowers already might have received their letter, said the office of Attorney General Douglas F. Gansler. In a statement, Gansler urged homeowners to "respond as soon as possible. " Those who don't get an offer in the mail by the end of May but think they're eligible should call the bank at 800-288-3212, he added.

A Baltimore County police union is suing the county retirement system's board of trustees over a $25 million loan the county took from the pension fund to update recycling facilities in Cockeysville. In a lawsuit filed last week in Circuit Court, the Baltimore County Fraternal Order of Police Lodge No. 4 claims the deal reflects a breach of duty, and the board did not get enough advice on the consequences of the loan or obtain adequate security. "We have a responsibility to the people we represent, and quite frankly, all county employees should be concerned about this," said union President Cole Weston.

IF YOU'RE ONE of the millions of American homeowners with an active credit line tied to the equity in your house, the odds are strong that you're not using the money to fix up your property, pay for college tuitions or invest in a business venture.A new national study of home-equity borrowers reveals that, while home improvement used to be the main reason people took out home equity loans, borrowers now tap their real estate equity primarily to pay off high-cost credit cards, charge account and personal loan balances with lower-cost, tax-deductible home equity dollars.

IF YOU'RE ONE OF THE hundreds of thousands of American homebuyers or refinancers who took out a popular, cut-rate mortgage earlier in the 1990s, carrying the name "balloon reset" or "two-step," get ready to make a key financial decision.The first wave of an estimated 800,000-plus Freddie Mac and Fannie Mae five-year and seven-year mortgages originated nationwide from 1991 onward is hitting its rate-adjustment or payoff points. And in some cases, say mortgage industry experts, borrowers are unaware of the special mechanics of their loans.

A recent survey for the Mortgage Bankers Association showed that almost half of borrowers think the information they receive from lenders is too much to comprehend.The survey, done by Yankelovich Partners during a three-week period that ended in mid-February, showed that 44 percent of borrowers felt that the settlement cost information was too much to understand all at once. Also, 31 percent of those surveyed said the biggest hurdle was understanding and completing the paperwork, while 17 percent had difficulty determining how much their loan would cost.

A transformation has been under way here that is changing the homeownership prospects - and choices - of thousands of first-time, moderate-income and minority families. It's also keeping more owners in their houses instead of facing foreclosure when they fall behind on payments. The Federal Housing Administration, long derided as the lending choice of last resort, has turned itself into what is arguably the consumer-protection leader in the mortgage industry, both for buyers and owners.

New York -- Having trouble paying bills? Falling behind on your payments to a bank or mortgage company? Every lending institution in America has some kind of policy in place for negotiating with borrowers who are financially strapped.The problem is, the lenders moan, that you don't use this service early enough. You should come clean with your creditors before black marks stipple your credit record.When you sit down to talk about your problems, they say, you'll probably be offered a temporary reduction in payments that might get you over the hump.

Washington -- The federal government has just put the finishing touches on rules that spell out key rights you have as a borrower once your mortgage loan has been closed.Though the regulations focus primarily on the servicing of your loan -- the collection of monthly principal, interest and escrow payments by your original lender or another firm -- they also govern how questions or disputes should be handled on your mortgage account.Issued by the Department of Housing and Urban Development (HUD)

Rep. Elijah E. Cummings is not happy that the Federal Reserve Board and the Office of the Comptroller of Currency settled with 10 mortgage servicers this week, putting an end to the Independent Foreclosure Review that the government required the firms to organize. “I am deeply disappointed that the OCC and the Federal Reserve finalized this settlement and effectively terminated the Independent Foreclosure Review process before providing Congress answers to serious questions about how this settlement amount was determined, who these funds will go to, and what will happen to other families who were abused by these mortgage servicing companies, but have not yet had their cases reviewed,” said Cummings, ranking member of the House Committee on Oversight and Government Reform, in a statement following the settlement announcement Monday.

President Barack Obama shares responsibility equally with the U.S. House of Representatives on the financial issues facing this country ("The GOP's cynical debt limit ploy," Dec. 10). He has not had a budget passed (or even got one vote in the Senate) and he has not proposed one fix to either Medicare (except taking dollars from Medicare in the Affordable Care Act) or Social Security (except helping bankrupt it sooner by his 2 percent reduction in withholding); both programs will be bankrupt within 20 years, and the time to fix that is now. The biggest social injustice in this country's 237 years is President Obama's borrowing 40 cents on every dollar to run the country.

Baltimore County has maintained its top bond ratings from the major rating agencies, county officials said Friday. The county received AAA bond ratings from Fitch, Moody's and Standard & Poor's. The agencies pointed to factors including the county's manageable debt burden, conservative fiscal practices and a large, diverse tax base. Less than 1 percent of counties in the country have AAA bond ratings from all three major rating agencies, county officials said. Favorable ratings help the county save money when it borrows.

Baltimore County sold $256 million in pension obligation bonds this week to fund its retirement system, and officials say the borrowing will cost less than they expected. The county borrowed the money at a 3.43 percent interest rate, compared with the 4.25 percent to 4.5 percent originally projected. Officials said Thursday they expect to save $343 million over the next three decades, compared with the $250 million they previously estimated. The county plans to pay the funds back over the next 30 years.

I read the recent article by Alison Knezevich regarding the Baltimore County Executive Kevin Kamenetz's proposal to invest county pension funds in the stock market with disbelief and aggravation ("Baltimore County weighs pension bonds," Oct. 14). Why are these politicians allowed to "borrow" funds that affect so many pensioners without actually allowing those pensioners the opportunity to say no? If this very risky venture should fail in 30 years, the proponents will be out of office and someone else will be blamed for the lack of funds remaining.

Here's the question about Baltimore County's pension borrowing plan ("Balto. County to borrow money for pension system," Oct. 16) that almost no one asks: If this is such a good idea, then instead of borrowing $255 million, why don't they borrow $500 million, $1 billion or even $2 billion and put the money "in the market?" You don't even need a pension fund to do it, just borrow the money and invest. What could go wrong? Stocks always go up like home values, don't they? People, including those that should know better, develop a mind-numbing myopia when it comes to pensions, the associated trust funds and foolish (GASB & FASB)

For four months this year, while Congress was overhauling student loan laws, I traveled the country in a beat-up RV meeting with citizens and legislators. My mission was simple: Persuade Congress to restore consumer protections to student loan borrowers. After 22,000 miles, 42 states and five flat tires, I can't help but feel that my efforts were a waste of time. And gas. Sure, the House and Senate passed the College Cost Reduction Act. The bill includes some attractive provisions for those headed back to campus this fall, including interest rate reductions, loan forgiveness for public service, Pell grant increases and income-contingent repayment plans for future graduates.

NEW YORK -- Financial reporters learn to believe in reincarnation. No idea truly dies. All things come back in another form. Following that rule, some of the big banks and S&Ls have reinvented the mortgage prepayment penalty.Many years ago, these penalties tied up almost every mortgage loan. You were charged a fee for repaying the loan before a certain number of years had passed.Consumers revolted against the practice. About 14 states banned prepayment penalties, in whole or in part; another 13 put limits on them.

Thousands of consumers have complained to the Consumer Financial Protection Bureau about loan servicing and loan modification problems. Gripes include mistakes by servicers in applying payments, trouble fixing errors, an overabundance of paper work and the inability to find anyone at the servicer to help. Another mortgage mess story? No, this is about private student loans - although the regulator notes that both industries share similar problems. The Consumer Financial Protection Bureau released its annual report on private loans.

Baltimore County will borrow up to $260 million for its pension system and pay off the debt over the next 30 years, under legislation approved Monday by the County Council. The council's 7-0 vote will let the county invest the borrowed funds in the stock market, a move that carries risk but that county officials say will close a gap in pension funding while saving money in the long run. County Executive Kevin Kamenetz's administration proposed the move, contending the county is financially stable enough to withstand the risk.