Fraud

What started out as a reasonable strategy to allow first time or low credit score buyers to own homes turned into a predatory lending and default spiral that brought down a $1.1 trillion-dollar yearly industry. In the wake of the subprime mortgage crisis, regulatory bodies and legislators alike stepped in to create safeguards against a future repetition. But the buyers once served by these mortgage brokers, the ones with less than stellar credit, are again looking to enter the world of home ownership. Where will they get the loans to do so? Less than a decade after the US housing market crashed, subprime mortgages are seeing a resurgence It seems the market is once again ready to enjoy the profits of lending to buyers who might be self-employed, have previous credit issues, or who have trouble documenting their income. Now the challenge is teaching brokers to successfully navigate the legal hurdles and regulation in the emerging field of “nonprime” mortgages. [...]

The role of brokers and registered investment advisors is invaluable; they educate investors; they manage the fine, tedious details of investing; and they give their best advice and guidance to clients who come from a variety of backgrounds and financial familiarities. Investing is much more of a science than an art. It is a learned skill. That means investment professionals who purport to offer information or techniques at odds with conventional wisdom may not be offering the most suitable advice to their clients. Every client has a unique mix of tolerance for risk and desire for speedy returns, and each broker has a legal responsibility to take those needs into consideration when recommending suitable investment products. Investors want to believe that their chosen professional offers a better perspective and more productive advice than another, but do the specifics of a portfolio recommendation matter? Within common sense parameters, many portfolios yield similar results A recent article by Michael Batnick, Director of [...]

Investment brokers have certain obligations to all their clients: to not only tell the truth, but also to provide guidance that reflects the client’s specific needs and wants. This responsibility is also known as suitability. Although suitability may at first seem amorphous, in reality, the law has set out very clear guidelines for what types of statements and promises a broker can make to a client, as well as legal penalties for infringing of those boundaries. In the Nomura Holdings Inc. trial, three professional investment brokers – Ross Shapiro, Michael Gramins and Tyler Peters – were charged with directly lying to their own clients and other brokers and training their subordinates to do likewise, creating a corporate culture of deception for personal profit. The evidence in the case lay primarily in electronic records of communications between the brokers and their clients, demonstrating that the three blatantly lied about the purchase price of a mortgage bond in order to drive up [...]

Pensions are the primary means of support for about one-half of Americans of retirement age or older. This income—set aside throughout the course of a lifetime of employment and work—is often supplemented by social security, or other retirement investing. However, America’s seniors are not usually living in the lap of luxury, bringing in an average of $1,500 per month from all sources, or about $18,000 per year. This can lead to periods of financial instability when unexpected medical bills, housing changes, and other events occur. How do American senior citizens get the money they need? All too often, it comes from exploitative moneylenders, borrowing against future pension income. What is promised vs. the fine print Even workers with good income sometimes encounter unexpected bills. For retirees on fixed incomes, these unanticipated costs can be devastating, particularly when it becomes a choice between needed healthcare and accepting unfavorable terms. Also known as “pension sales,” “pension buyouts,” or “pension loans,” pension advance [...]