Simply the idea of having the bank send a home owner a check every month for living in the home in which they have built equity to many sounds like a great way to help cover expenses in retirement years. Home Equity Conversion Mortgages (HECM), the so-called reverse mortgage, are not new. Recent months have propelled these loans more into the spot light as brokers and lenders scrambled for ways to continue in business after the bubble.

Essentially the HECM is a refinance loan which works in the reverse manner from a standard home mortgage. Instead of the home owner leveraging the equity in their property and borrowing a lump sum using their home as collateral the lender will send a check to the home owner on a monthly basis and slowly consume the equity.

Home owners must have reached a minimum amount of equity in their home and have reached retirement age which automatically gives an air of suspicion to the loans. The Department of Housing and Urban Development has not always insured this type of mortgage but their entry into the marketplace with their HECM has offered more of a safety net to borrowers.

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Critically needed legislation sponsored by New York State Senator Neil D. Breslin (D-Delmar), has been signed into law by Governor David A. Paterson. This legislation regulates the billion dollar life settlement market in New York ensuring that, among other things, the medical and financial information of those who enter into a life settlement transaction is protected.

The life settlement industry began in the late 1970’s and 1980’s when, during the AIDS epidemic, many seriously ill individuals with life insurance policies sold their policies to pay for medical care, experimental medical treatments or other essential needs. In 1994, Article 78 of the Insurance Law was enacted to regulate transactions where an insured with a catastrophic or life-threatening illness or condition sold his or her life insurance policy.

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Many community banks face a dilemma. Their main reason for being is to make commercial real estate loans, and a fledgling economic recovery depends, in part, on them making more of them. But increasing loan defaults in a distressed commercial real estate market is making it a riskier business.

Troubled commercial real estate loans are expected to add to the growing number of U.S. bank failures. In turn, a federal regulator is pushing banks in North Jersey and around the country to reduce their commercial real estate, by either curtailing lending, writing off or selling loans, or by raising additional capital to offset the increased risk.

Mariner’s Bank in Edgewater, a bank with $315 million in assets, has heeded the concern and has stopped making commercial real estate loans to new customers to reduce exposure, said Fred Daibes, the bank’s chairman.

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After nearly a decade from when it was first conceived, the Genetic Information Nondiscrimination Act has finally become a law.

This watershed legislation prohibits employers from considering genetic structure while hiring, firing or promoting a person.

Protection to employees

The Genetic Information Nondiscrimination Act is the second such law, after the Americans with Disabilities Act of 1990, which offers extensive protection to employees.

The new law stresses that at a workplace place the only criteria for judging a person should be their merit, Stuart J. Ishimaru, acting chairman of the Equal Employment Opportunity Commission stated.

“No one should be denied a job or the right to be treated fairly in the workplace based on fears that he or she may develop some condition in the future,” he said.

In addition to the workplace protection, the new law also checks health insurers to deny a person insurance coverage or alter insurance rates based on genetic makeup, which may include conditions like tendency for Parkinson’s etc.

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San Diego The 2010 president of the National Association of Realtors said that most members of her trade group did nothing to contribute to the global economic meltdown, adding that Realtors “don’t have to do any soul searching.”

Asked at the NAR convention in San Diego if there are lessons for the future about Realtors’ role in the housing bust, Vicki Cox Golder said no.

“For a Realtor to put someone in a property they can’t afford is something we never do,” Golder told reporters at a media briefing. “We don’t have to do any soul searching because our code of ethics is solid.”

The Realtor trade group touts its code of ethics in promotion materials as a strong reason why consumers should hire NAR members rather than using non-member real estate agents.

Although a number of analysts have said that the blame for the housing meltdown is shared by a wide group of players – from Wall Street and lenders to mortgage brokers and even consumers – Golder said that nothing occurred to make her think that NAR’s code of ethics needs revision or better enforcement.

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The Lafourche Parish School board voted last week to opt out of the federal Michelle’s Law, which allows sick college students who leave school for treatment to keep their insurance.

That is unfortunate.

The law — named in honor of the late Michelle Morse of New Hampshire — requires insurance companies to continue coverage for college students who have to drop out of school due to serious illnesses.

Because so many college students are covered by their parents’ policies rather than policies of their own, they run the risk of losing if they leave school, ironically even if it is for medical treatment.

So Congress passed Michelle’s law and President George W. Bush signed it into law in 2008. It requires insurance companies to cover students when they leave school because of serious illness.

Unfortunately, there is a loophole that allowed the Lafourche School Board to get out of the provisions of the law.

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Q. With the real estate market so beat up, is it time to buy into real estate investment trusts?

Morose in Manville

A: As frightening as stocks were during the bear market, the performance of real estate investment trusts was even scarier.

REITs are companies that invest in real estate and must pay out most of their profits to shareholders, hence, the high yields.

Standard & Poor’s 500-stock index plunged 55 percent from October 9, 2007, through March 9 of this year. The MSCI U.S. REIT index started its collapse eight months earlier, and from peak to trough it plummeted 74 percent.

But since stocks began their remarkable ascent on March 10, REITs have shown that, as is often the case, the harder you fall, the bigger your recovery. From March 9 through September 17, the index soared 109 percent, outpacing the S&P 500’s spectacular 59 percent. However, real estate trusts are still down 44 percent from their February 2007 peak.

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State Farm Lloyds must pay home insurance policyholders $310 million in refunds and interest for overcharges stretching back as far as six years, the state’s insurance commissioner ordered Monday.

The order completes insurance reforms state lawmakers started in 2003, Insurance Commissioner Mike Geeslin said in a written statement.

“There is evidence, there is law, and between the two you come up with $310 million,” he said.

Kevin Davis, a spokesman for State Farm, said the company was disappointed with the decision and insisted its rates have always been fair and justified.

“This type of regulation threatens the free market place and creates an unstable environment for insurance companies and policyholders,” he said.

State Farm has 10 days to appeal. An appeal would put refund payments on hold until the courts resolve the case.

The order is the latest development in a 6-year-old case in which regulators ordered the company to cut its rates 12 percent.

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Federal regulators haven’t put enough pressure on banks to unload poorly performing commercial real estate loans, according to a panel of industry leaders convened by the Federal Reserve Bank of Atlanta.

The trend has stifled investment sales and kept the market from bottoming out and recovering faster, observers say.

Instead, commercial real estate investors have held onto their cash until banks have failed. Once regulators took over, the FDIC seemed more willing to sell the nonperforming loans, according to a Federal Reserve panel.

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Mortgage interest rates dropped again this week, hitting 4.91 percent with 0.7 points (prepaid interest) for a 30-year fixed-rate loan. That is so low it almost demands a rush to the refinancing table. (Then again, bank deposits are paying less than 2 percent, so maybe rates aren’t that low, after all.)

Rates locked in for three decades now cost only 0.45 percentage points more than for a one-year adjustable-rate mortgage. One-year ARMS averaged 4.46 percent this week, according to Freddie. The the vast majority of borrowers would be foolish to take an ARM when fixed-rates are so close in price.

But should you rush to refinance? If you’ve lost a job or your home equity, of course, the question is moot. You won’t qualify, and today’s low rates only serve to taunt you with the better prospects available to others. But if you have the equity, the income and the credit rating, it’s certainly worth exploring.

For example, refinancing a $300,000 mortgage, from 6 percent to 4.91 percent would save $205 each month. If you paid the 0.7 points that Freddie said was the average amount charged, you’d have to pay $2,100 in upfront interest, usually out of your equity. It would take a little over 10 months to recoup that expense, but the boost to your monthly cash flow could give anyone’s household budget a nice bit of relief.

Other things to consider: All these numbers are averages, and Freddie Mac collected them earlier in the week. They were history even before they were published. And the actual rates you are quoted will depend on your credit scores and overall risk profile. You can expect to pay $250-$300 for an appraisal, plus other closing costs. And credit standards are particularly picky (and rates are higher) for anyone who needs a loan bigger than $729,750–the threshold for “jumbo” loans in expensive markets such as the Washington metro area.

Found here.