Real Estate

The SEC put a stop to a $50 million real estate focused Ponzi scheme that targeted elderly investors in the Detroit area. John Bravata and Richard Trabulsy apparently lured more than 400 elderly investors with the promise of safe 8% - 12% returns. Many of the investors were solicited with " free lunch " seminars. The reality of the situation, however, was very different than what was promised: The men “lied” to prospective investors about the use of funds and spent $7.2 million...

New guidelines allowing older borrowers to use a reverse mortgage to purchase a principal residence went into effect earlier this year. Previous guidelines had restricted the use of reverse mortgages to real estate transactions that involved refinancing. Until recently, lenders had been waiting on the sidelines in anticipation of further clarification from the federal government. However, lending activity does appear to be picking-up. A recent New York Times article provides specific examples...