The U.S. is taking steps to stamp out the practice of service members and veterans being pressured into taking mortgages they don’t need, a move that officials say will lower consumer costs and could lead to financial penalties for lenders.

The actions, which were announced Thursday, stem from a probe by Ginnie Mae, a government-owned corporation that guarantees payment on $2 trillion-worth of mortgage-backed securities. Its bonds include loans made through the Department of Veterans Affairs as well as other federal programs meant for low-wealth or rural borrowers.

In September, Ginnie said it found that lenders had been hounding veterans into refinancing loans over and over, a practice that can drive up a homeowners’ debt while generating profit for the lender. Sen. Elizabeth Warren, the Massachusetts Democrat, and other lawmakers called on Ginnie to find a way to stop the practice, which is known as churning.

Ginnie’s changes, meant to address those concerns, could have a big impact on fast-growing mortgage firms that have made a specialty in lending to vets. Those lenders include Freedom Mortgage Co. and NewDay USA, which issue the vast majority of the loans with rates that are more than a percentage point and a half above the rest of the market, according to Ginnie Mae data.

According to public records, Freedom and NewDay refinanced the home of one borrower seven times in two years between 2014 and 2016. Four of those refinances were performed by Freedom. NewDay followed with two more, and the final refinance came from a different lender.

NewDay specializes in cash-out refinances for veterans who want to take out money for purposes like consolidating debt. Its rates on most of those loans are above those of other lenders.

Joseph Murin, NewDay’s chairman emeritus, said Wednesday that the firm’s rates are higher because they’re willing to take on more risk than others, such as through lending to borrowers with lower credit scores and letting them take out more cash. Murin said that though NewDay’s loans tend to refinance quickly, that’s because other lenders swoop in and pick off those borrowers, rather than NewDay refinancing them itself. He added that the company doesn’t charge veterans fees on simple refinances.

Freedom Chief Executive Officer Stanley Middleman acknowledged that his company refinances some borrowers quickly but said the company doesn’t charge fees to those borrowers and only uses the practice because its afraid other lenders will perform the refinance instead.

“We are really aligned with wanting the investor to be happy and really aligned with wanting the customer to be happy, just not at our expense,” Middleman said. “If we’re vulnerable, we’re going to have to defend ourselves.”

Thursday’s changes will restrict how often a lender is allowed to put a mortgage to a particular borrower in a Ginnie-backed bond. Last year, Ginnie imposed a six-month moratorium, but allowed exceptions for certain kinds of mortgages. Starting in April, there won’t be any exceptions, Ginnie said.

The agency said it will also start to more closely track how quickly certain lenders refinance borrowers and what rates they charge. If a lender’s mortgages refinance extremely quickly or if they charge rates that are more than 1.5 percentage points above the market, they may face penalties.

The bonds the lenders issue would carry a designation flagging to investors that they are more prone to rapid refinances. That scarlet letter would likely hurt the price the lender could get for the bonds, lowering their profits and making it harder for them to offer competitive rates.

“It makes me sick that predatory lending behavior is back and particularly sick that it’s focused on veterans,” Bright said.

Courtesy of Joe Light via Bloomberg

In his view, Tim Franson utterly failed at retirement.

After 20 years as a high-ranking vice president at drugmaker Eli Lilly, Franson and his wife, Chris, a successful real estate agent, thought they were quietly retiring nearly a decade ago to Bonita Springs, Fla.

For the first month or so, Franson said, he mostly slept. He wasn’t depressed, just mentally and physically exhausted.

Then, “I went crazy,” said Franson. “I’m not very good at sitting around.”

He quickly found himself back at work part time after a friend at a small pharmaceutical company asked him for strategic advice. “Things snowballed from there.”

Today, Franson, 66, consults and works about four days a week, while serving on two for-profit boards and two non-profit boards.

Not new, but growing

Welcome to the land of the un-retired — folks who thought they were leaving the work world only to return because they sorely missed something about it, besides the money. These people in their 50s through 80s retired on pensions or savings — or both — but ultimately woke up to the fact there’s more to life than watching Florida sunsets.

This “un-retirement” trend continues to build, according to a 2017 Rand Corp. study showing that 39% of Americans 65 and older who are currently employed had previously retired. And more than half of those 50 and older who are not working and not searching for work said they would work if the “right opportunity came along,” the study found.

“We have a mistaken image of life, that you go to school, work for 40 years, then say goodbye to colleagues for the last time and embrace the leisure life,” said Chris Farrell, author of Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life. “That’s not turning out to be the arc of most people’s lives.”
About people and not dollars

This isn’t about older folks returning to work because they need the dough. This is about older folks returning to work because they miss the challenges, the accomplishments and, most important, the collegiality.

When retirees are asked what they miss most about pre-retirement life, the No. 1 answer is typically colleagues, said Farrell. “What’s constantly underestimated is that work is really a community. It turns out it’s much healthier and more satisfying to work for a bad boss than to sit on the couch and watch TV,” he said.

Franson gets that. Not that it didn’t make perfect sense for him to retire when he did, at age 58. Lilly offered him a year’s pay and a full pension to take early retirement. Franson had prostate cancer while at Lilly — and though the surgery was successful, he said, “that experience makes you sit back and revisit how you want to experience your remaining days.” At the time, his kids were out of college, and he didn’t have any grandkids yet.

Then, life derailed him when his wife, Chris, took ill and died within a few years. Four years ago, he accepted another consulting job in the Indianapolis area to be closer to his children and grandchildren. Franson has no plans to retire from his un-retirement anytime soon.

Then, there’s Louise Klaber. She retired at age 65 from a 20-year career in organizational development — but is now working again at age 81.

In 2001, the former New Yorker thought she was living the dream when she arranged to retire to New York City with husband Ralph Walde, a college professor.

Sept. 13 was moving day into their apartment on New York’s Upper West Side. But as the horrific events of 9/11 unfurled, they found they were living in a state of shock. Within weeks, they were both signed up to do volunteer work helping prepare meals for the 9/11 site workers. Their shift: 8 p.m. to 6 a.m., chopping squash, carrots and onions. “It made us feel like we were actually doing something to help,” Klabe said.

The prep kitchen shut down shortly after Thanksgiving, and she found part-time paid work assisting people most severely affected by 9/11 find financial aid, mental health assistance or employment. She then contacted ReServe, a national non-profit that places retired professionals with public service agencies of all sizes, budgets and missions. ReServe linked Klaber with the New York City Law Department, where she has worked part time ever since as an organization development counselor. What drives her isn’t the $10-an-hour pay but the professional camaraderie.

A former marathon runner, Klaber still runs almost daily. That, she said, is an important ingredient for staying healthy — but the work is just as important to her vitality.

When will she finally quit working?

“God only knows,” she said. “I’m having way too much fun.”

Courtesy of Bruce Horovitz, Kaiser Health News

By Lauren Camera via USA News

Secretary of Education Betsy DeVos says too many students with disabilities are caught in a cycle of low academic expectations and that the status quo of schools doing the minimum legally required to educate them must end.

“Too often, the families of disabled children have felt that their children are not being adequately challenged academically or given the support needed to grow and thrive,” she wrote in a commentary for Education Week.

“To these parents, it often seems as if the school district is content with simply passing their child along, rather than focusing on helping him or her progress and grow academically,” DeVos wrote. “They recognize that the de minimis standard isn’t working for their child, but, sadly, they often do not have the opportunity to access something better.”

In the commentary, the secretary focuses on the impact of a recent and unanimous U.S. Supreme Court decision, Endrew F. v. Douglas County School District, which held that a child with autism is entitled to an individual education program that requires more than the “de minimis,” or minimum, progress set by the school.

“When it comes to educating students with disabilities, failure is not acceptable,” she wrote. “De minimis isn’t either.”

The commentary serves to highlight the recent Q&A document the Department of Education released last week that outlines to impact of the court’s decision on the Individuals with Disabilities Education Act and other federal laws and regulations that pertain to students with disabilities.

Her remarks also come as she mulls the elimination of two major Obama-era civil rights regulations that would impact students with disabilities: One aimed at stemming the school-to-prison pipeline by prodding schools to reduce the number of suspensions and expulsions of students of color and students with disabilities, both of whom receive such disciplinary actions at disproportionately high rates; and the second aimed at ensuring states are paying attention to whether their students of color are being identified as having learning disabilities at a greater rate than white students.

The short, 520-word commentary did not touch on the regulations, though the fate of those regulations will fuel the already charged debate that is set to consume the education sector in the coming months.

“Tolerating low-expectations for children with disabilities must end,” she wrote.

Article Courtesy of NAELA
Written by: Lauren S. Marinaro, Esq.

House Republicans have introduced their plan to reform the tax code. The legislation calls for ending the medical expense deduction (MED). NAELA anticipates this proposed change will cause major disruption to individuals and families trying to pay for the catastrophic costs of long-term services and supports (LTSS).

The MED has been in the tax code in one form or another since 1942. Elder law attorneys are intimately familiar with it because they have a front-row seat to their elderly clients’ chronic illnesses and long-term care expenditures as well as the special medical and remedial care expenses of individuals with disabilities. In my work as an elder law attorney, I deal with this tax deduction every single day, usually to reassure my clients that they will probably not have to worry about the tax consequences of paying for long-term care (LTC) themselves.

Right now, the MED is used for a variety of expenditures and situations. Taxpayers can deduct medical expenses in excess of 10 percent of their Adjusted Gross Income for the 2017 tax year. The MED can be used when people are:

– Trying to afford their health insurance premiums, co-pays, and deductibles
– Paying for the cost of childbirth and post-natal care
– Paying for their own LTC or the LTC of a dependent child, parent, or other relative
– Paying for assisted living
– Paying a Medicaid cost share to a facility
– Using pre-tax accounts for catastrophic medical expenses when they have no insurance or insufficient insurance coverage
– Paying for home accessibility for disabling conditions
– Paying for dental work, which is critical to long-term health
– Paying for toxic lead or mold remediation
– Paying for drug abuse rehabilitation for their dependent relative
– Paying for additional ABA for a child on the autism spectrum

Our current LTSS system is driven by Medicaid, a means-tested program, and it sometimes acts as a disincentive for the middle and working class to save. Perversely, many middle- and working-class individuals who develop a chronic illness would have been better off had they not saved at all, thereby allowing them to qualify immediately for Medicaid. Clients express this frustration to us all the time. The MED acts as a key counterweight to that disincentive by substantially expanding the length of time someone could pay privately before needing government assistance.

The Republican Tax Reform plan takes this important tax incentive away without any appropriate justification other than tax code simplification. Elder and special needs law attorneys are leading the way in educating and persuading stakeholders and the larger public to work as hard to fight back against removing the MED.

Here’s how you can help:

– Call your representative – Look up the direct office number in the House of Representatives Directory.
– Post this or your own thoughts on social media.
– Warn others in your local community organizations.

Washington, DC — The Senate Republican tax bill keeps the medical expense tax deduction that helps millions of Americans with high medical costs. This deduction is especially important to people with disabilities and middle-income seniors.

The House version of the bill repeals the medical expense deduction. All Americans who have high health care costs will face a serious risk of a big tax increase just because of their medical expenses.

NAELA President Hyman G. Darling, CELA, CAP, states that, “If Congress ends the medical expense deduction, many Americans paying for long-term services and supports (LTSS) will not be able to pay for both LTSS and federal income taxes at the same time.”

NAELA joined forces with AARP and other advocacy groups in a full-page ad in Politico that supports the medical expense deduction urging that the medical expense deduction provision be kept.

The Medical Expense Deduction for the Chronically Ill
Key Points
Takeaway:
If Congress ends the Medical Expense Deduction, many Americans paying for Long-Term Services and Supports (LTSS) costs will not be able to pay for both LTSS and federal income tax at the same time. Raising
the standard deduction and lowering rates will not address the issue. Why? Because many chronically ill Americans will pay all of their income towards care, and without the Medical Expense Deduction they could still have a tax liability that they cannot afford to pay.

Background: Long-term Services and Supports (LTSS)

Provides assistance with activities of daily living, such as feeding, getting dressed, or bathing.

Common conditions requiring LTSS: Alzheimer’s disease, Multiple Sclerosis, or spinal cord injury.

It’s expensive:

15% of those turning 65 can expect LTSS costs of over $250,000

A private nursing home bed costs a median of $97,000 a year.

Medicare does not cover LTSS. Medicaid is the primary payor, covering more than half of all LTSS costs.

The Medical Expense Deduction For Individuals with LTSS

The deduction applies only to those expenses above 10% of Adjusted
Gross Income and when a taxpayer must itemize their deduction.

“Chronically ill individuals” can use this provision to deduct “qualified long-term care expenses,” such as nursing home or personal care services.

Impact of Ending the Medical Expense Deduction

Possible Eviction From a Care Facility. Without the deduction, individuals paying privately for LTSS may not have the funds to pay their tax liability and cost of care. This could lead to eviction from a care facility.

Uncollectible Tax From Some Medicaid LTSS Population.

Individuals in Medicaid must contribute substantially all their income to pay for care with Medicaid paying the rest. They will not have funds to pay their tax liability.

Hurts Family Caregivers. Children can also use this deduction if they pay for more than half of his or her parent’s care. Eliminating this deduction will have a negative effect on the financial well-being of a child trying to care for a chronically ill parent.

Increased Reliance of Government Programs. Many middle- and working-class individuals must “spend-down” their resources to qualify for Medicaid. This will happen much faster without a tax subsidy and
will place a larger burden on an already stressed federal/state system.