Category Archives: baby boomers

How reverse mortgages staged a comeback

Professor Chris Mayer has a lesson for ­homeowners: Reverse mortgages, which let older Americans tap their home equity without selling or moving, aren’t as risky as some say. In an online video, he brushes aside “common misconceptions,” including fears about losing your home.

Mayer, a real estate professor at Columbia Business School, isn’t an impartial observer. He’s chief executive officer of a company that sells reverse mortgages. He’s trying to rehabilitate one of the U.S.’s most-­reviled financial products—part of a broader push that relies in part on academics with interests in the mortgage industry.

The host of Mayer’s talk was the American College of Financial Services, a school that trains financial planners and insurance agents. Until recently, it had a task force funded by reverse mortgage companies, which each contribute $40,000 a year. They include Mayer’s firm, Longbridge Financial, and Quicken Loans’ One Reverse Mortgage.

To show the need for reverse mortgages, industry websites cite a Boston College retirement research center run by Alicia Munnell, a professor and former assistant secretary of the Treasury Department in the Clinton administration. She once invested $150,000 in Mayer’s company, though she’s since sold her stake.

The six-year-old task force cites key successes. Mainstream publications have run articles quoting positive research on the loans, and financial planners are growing more comfortable recommending them. The Financial Industry Regulatory Authority, the securities industry’s self-regulatory agency, in 2014 withdrew its warning that reverse mortgages should generally be used as “a last resort.”

Mayer and Munnell said they’ve fully disclosed, in research, appearances, and interviews, their financial interest in the lender. Columbia and Boston College both said they approved the arrangements.

The professors and industry officials say these government-backed mortgages deserve a second look, partly because of a series of federal reforms in recent years designed to protect taxpayers and consumers.

“We are looking to help people responsibly incorporate home equity in their retirement planning,” Mayer said of Longbridge.

Reverse mortgages let homeowners draw down their equity in monthly installments, lines of credit or lump sums. The balance grows over time and comes due on the borrower’s death, at which point their heirs may pay off the loan when they sell the house. Borrowers must keep paying taxes, insurance, maintenance and utilities—and could face foreclosure if they don’t.

While even critics say the mortgages can make sense for some customers, they say the loans are still too expensive and can tempt seniors to spend their home equity early, before they might need it for health expenses.

Fees on a $100,000 loan, based on a $200,000 home, can total $10,000. Because the fees are typically wrapped into the mortgage, they compound at interest rates that can rise over time. Homeowners who need cash could be better off selling and moving to less expensive quarters.

“The profits are significant, the oversight is minimal, and greed could work to the disadvantage of seniors who should be protected by government programs and not targeted as prey,” said Dave Stevens, CEO of the Mortgage Bankers Association until last year and a commissioner for the Federal Housing Administration in the Obama administration.

Academics represent a new face for an industry that’s long relied on aging celebrity pitchmen. The late Fred Thompson, a U.S. senator and Law & Order actor, represented American Advisors Group, the industry’s biggest player. These days, the same company leans on actor Tom Selleck.

“Just like you, I thought reverse mortgages had to have some catch,” Selleck says in an online video. “Then I did some homework and found out it’s not any of that. It’s not another way for a bank to get your house.”

Michael Douglas, in his Golden Globe-winning performance on the Netflix series The Kominsky Method, satirizes such pitches. His financially desperate character, an acting teacher, quits filming a reverse mortgage commercial because he can’t stomach the script.

In 2016 administrative proceedings, the U.S. Consumer Financial Protection Bureau accused American Advisors, as well as two other companies, of running deceptive ads. Without admitting or denying the allegations, American Advisors agreed to add more caveats to its advertising and pay a $400,000 fine.

Company spokesman Ryan Whittington said the company has since made “significant investments” in compliance. Reverse mortgages are “highly regulated, viable financial tools,” and all customers must undergo third-party counseling before buying one, he said.

The FHA has backed more than 1 million such reverse mortgages. Homeowners pay into an insurance fund an upfront fee equal to 2 percent of a home’s value, as well as an additional half a percentage point every year.

After the last housing crash, taxpayers had to make up a $1.7 billion shortfall because of reverse mortgage losses. Over the past five years, the government has been tightening rules, such as requiring homeowners to show they can afford tax and insurance payments.

In response to public concerns, Shelley Giordino, then an executive at reverse mortgage company Security 1 Lending, co-founded the Funding Longevity Task Force in 2012. It later became affiliated with the Bryn Mawr, Pennsylvania-based American College of Financial Services.

Giordino, who now works for Mutual of Omaha’s reverse mortgage division, described her role as “head cheerleader” for positive reverse mortgages research. Gregg Smith, CEO of One Reverse Mortgage, said the group is promoting “true academic research,” including work by professors with no industry ties.

In January, the American College cut its ties with the task force because the school, as a nonprofit institution, wasn’t comfortable being affiliated with an organization endorsing products, according to Vice President James N. Katsaounis. “A proper retirement portfolio is one that is well-balanced and diversified, which may or may not include reverse mortgages,” he said.

Mayer, the Columbia professor and reverse mortgage company CEO, said many older consumers could benefit from the loans because they can never owe more than their house is worth even if real estate prices plunge.

A former economist at the Federal Reserve of Boston with a Ph.D. from the Massachusetts Institute of Technology, Mayer joined the Columbia faculty in 2004 and currently co-­directs Columbia’s Paul Milstein Center for Real Estate. He wrote his first paper on reverse mortgages in 1994, when the FHA product was five years old.

In 2012, Mayer co-founded Longbridge, based in Mahwah, New Jersey, and in 2013 became CEO. He’s on the board of the National Reverse Mortgage Lenders Association. He said his company, which services 10,000 loans, hasn’t had a single completed foreclosure because of failure to pay property taxes or insurance.

While many colleges let professors engage in outside business activities, Gerald Epstein, a University of Massachusetts economics professor who’s studied academic conflicts of interest, said Columbia may need to scrutinize Mayer’s arrangement closely.

“They really should be careful when people have this kind of dual loyalty,” he said.

Columbia said it monitors Mayer’s employment as CEO of the mortgage company to ensure compliance with its policies. “Professor Mayer has demonstrated a commitment to openness and transparency by disclosing outside affiliations,” said Chris Cashman, a spokesman for the business school. Mayer has a “special appointment,” which reduces his salary and teaching load and also caps his hours at Longbridge, Cashman said.

Likewise, Boston College said it reviewed Professor Munnell’s investment in Mayer’s company, on whose board she served from 2012 through 2014. Munnell said another round of investors in 2016 bought out her $150,000 stake in Longbridge for an additional $4,000 in interest.

She said she now prefers another approach: States allowing seniors to defer property tax payments. The advantages include “no fee, no paperwork and no salespeople,” she said. In one way, she’s glad she exited her reverse mortgage investments.

“Anytime I had a conversation like this, I had to say at the beginning that I have $150,000 in Longbridge,” she said. “I had to do it all the time. I’m just as happy to be out, for my academic life.”

 

Source: Copyright Bloomberg News – Business News 13 Mar 2019

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Advice for retirees who must answer the question: Buy, sell or rent?

It wasn’t that long ago when the outlook for retirees focused on baby boomers downsizing and moving into smaller homes in the country — trading an urban lifestyle with a relaxing, rural retirement.

Fast forward 20 years, and many retirees are opting to stay in their homes for longer: renovating, upgrading and improving accessibility along the way.

A comfortable home is a comfortable lifestyle that many are not willing, or wanting, to give up.

The definition of “old” has changed.

Joseph Segal, the founder of Kingswood Capital, has just put his tony 22,000-square -foot home in Vancouver’s west side up for sale, for $63 million.

Why? Because they are downsizing to a smaller home in Vancouver.

“I’m an old man,” said the 92-year-old Segal, and “it’s a big place.”

Many of us are living longer and have healthier lifespans with various sources of retirement income, and ultimately we will ask the question: should we buy a condo, downsize to a smaller home or cash in and rent?

All options have pros and cons.

Is a condo right for you? 

Buying a condo may mean downsizing our footprint, but in many cases it doesn’t mean downsizing the cost.

Retirement communities are being pitched to seniors across the country with promises of amenities such as entertainment, hospitals to retail.

Many choose to be closer to families along with the desire to live in accommodations that are maintenance free. It can be enticing.

On the other hand, the concern over new costs such as condo fees or retirement residence fees can be worrisome.

Is it time to downsize?

In a hot real estate market, the temptation to cash in and lock in your appreciation can be overwhelming.

But before you do, Ted Rechtschaffen, president and CEO of TriDelta Financial, said in a BNN interview to ask yourself: is the house I’m in now too large or too difficult for me to manage?

And consider where your wealth is concentrated. Do you have too much of your wealth tied up in real estate? You have to live somewhere. So do you buy or rent? Unless you plan on living in a home for at least 6 years, you might be better off renting.

Bottom line

I’ve never been a fan of trying to time the market. You have to get it right at least twice. Going in and getting out.

Consider your lifestyle, potential longevity and retirement funding options. Even if you don’t pick the peak of the market you are still holding on to the lottery ticket that doesn’t have an expiration date.

You get to cash in when you need to, or want to.

Source: CTV – Patricia Lovett-ReidChief Financial Commentator, CTV News

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4 things credit unions do that make banking with them better

On a scale of one to 10, how much do you like financial advisors?

Be honest…

Unsurprisingly, you’re not the only one. It turns out a lot of millennials have a” negative perception of financial advisers,” according to a millennials and wealth management report by Deloitte.

It also points out that word-of-mouth and personal recommendations significantly influence around 50% of millennials. Yep, they’re more likely to “consult peers and media” instead of using a financial adviser and those who do use an advisor are likely to cross-check the facts using external sources.

So you could say that there’s a sense of distrust felt by youth in Canada when it comes to banking. If you have to question your bank that much, maybe it’s not the one for you. Banking should be easy because you don’t need any unnecessary stress factors in your life.

Luckily, you have another option (no, not carrying cash on you 24/7) – banking with a credit union. These financial institutions act in the interest of their members and work to make things better in your local community (without the drab financial advisor spiel).

With that in mind, we’ve compiled a list of four lovely things credit unions do.

They’re involved with the community

Credit unions understand that most young families in Ontario are dealing with large amounts of debt ranging from credit cards to student loans, and mortgages. Understanding the impact of heavy debt loads on the future of young people, credit unions want to step in and help any way they can. Aside from helping with debt management, they’re also involved in grassroots programs in their communities. Credit union staff members volunteer thousands of hours each year to help local non-profits and community initiatives. And they also help their communities thrive by hiring locally, keeping their members’ dollars local, and reinvesting their profits back in the local area. 

They’re environmentally friendly

Given the very nature of their cooperative model, it should come as no surprise that over the years, many credit unions have been recognized as Canada’s Greenest Employers. In fact, Ontario’s credit unions have made environmental performance a key part of their growth strategy, and are engaged in a full spectrum of operational improvements. But it doesn’t end there, they also have social and environmental finance innovations aimed at improving every aspect of their operation – from carbon neutrality and paperless banking to responsible investing, assistance for green start-ups, and social enterprise.

They help individuals, local businesses, and charities

The act of charity is centered around helping people in need. And since credit unions strongly believe in helping people, it’s only natural that they’re involved in a variety of charitable endeavours. From local sponsorships, to grants, bursaries, and even financial literacy blogs, credit unions are pretty much dedicated to helping everyone. They also support local community events and non-profit organizations through donations. When several provinces were suffering from floods earlier this year, multiple credit unions across Canada rallied to donate $150,000 to the Red Cross at a moment’s notice.

They offer tailored financial advice

Credit union staff ensure products are tailored to the specific financial needs of each customer. This means you’re not going to hear about investment portfolio options when you simply want to set up a savings account (unless you want to). Irrespective of your current financial situation, credit unions can help you tackle debt, save for a large purchase, or plan for a stress-free retirement. With the expertise to provide financial guidance to help their members build a strong foundation for their future, it’s no wonder that more and more Canadians are switching to credit unions. Will you?

Source: DailyHive.com – Daily Hive Custom ContentDec 11, 2017 

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Who gets what in a blended family with no will?

Q: What happens if I die, was previously married and had a will—but am now remarried (blended family) and have not written a new will? What happens to my estate if I die? How is it divided? Does my new spouse get all the assets? Or is it split between all children (his and mine)? Or do just my own children and spouse inherit everything? Or just my children?

—Donna

A: Donna, You ask, “What happens to your blended family if you die?”

The simple answer is that no one knows. No one can give you an answer without knowing your specific circumstances. You cannot get simple answers to comfort you. I’m not trying to scare you, but you need to get advice.

There are so many variables that determine who shares in your assets. Here are some variables that only involve children when parents die:

Minor Children Suffer Most

  • What are the ages of all children (his and yours)?
  • Are you supporting any children?
  • Are any children financially dependent?
  • Do you need guardians for children who are minors?
  • Should trusts be set up to invest minor’s inheritances?
  • Is any child on government assistance?
  • Should discretionary trusts be used for spendthrift children?
  • Do estranged children have claims to your estate?
  • Did you promise to pay for their children’s education or wedding?

You can protect minors with a will and estate plan.

Government Rules May Divide Your Estate

What happens if you don’t take the time to prepare an estate plan?

The government has a will for you that cannot be varied.

Governments have rules to divide your estate among your next of kin. These rigid rules are not flexible. These rules dictate who controls your money and who is your executor. They also decide who gets what and when.

What about Spouses and Wills?

Another set of variables applies to your spouse.

  • What if your new spouse has more wealth than you?
  • Should your money go to your spouse or your children?
  • What if your spouse requires a full-time personal service worker?

You Need to Reduce Taxes

Government tax rules apply if you have no will. As you can imagine, the government does not give you any tax breaks. You will pay the maximum in income and probate taxes.

You cannot use any tax deferrals or tax reduction options. You need to learn how to designate some assets like tax-free savings accounts and registered plans. You may need to protect your assets from creditors or prior spouses.

All of these variables affect what your family receives if you die. These examples do not consider lawsuits from prior spouses. All lawsuits waste your money and incur legal costs and delays. Lawsuits also destroy families and wipe out estates.

Estate Planning Can Avoid Lawsuits

You need to consider tax, estate and family laws. You need good professional advice to get it right.

Remember: estate planning is what you do for the people you leave behind.

If you love your family, find the time and write a will.

Source: Moneysense.ca – by  

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Indebted seniors among Canada’s most at-risk sectors

Indebted seniors among Canada’s most at-risk sectors

 

Indebtedness among Canada’s elderly population is on the rise, according to academics and financial experts at an international conference at Ottawa’s Carleton University last week.

Contributing to this trend—not just in Canada, but worldwide as well—are multiple pressures that include easy credit, unreliable pension plans, divorce among seniors, unmonitored spending by people with dementia, and financing the needs of younger family members.

Compounding the issue is a similar growth in the number of people in late middle age who are quitting employment or taking on even greater debt, either to care for their aging parents or to help their adult children buy their own homes.

“There is the worldwide phenomenon of older people who go into debt to help their children,” Carleton University School of Public Policy and Administration professor Saul Schwartz said, as quoted by the Ottawa Citizen.

Earlier this year, a global survey commissioned by HSBC found that 37 per cent of young Canadians who currently have their own homes used the “Bank of Mom and Dad” as a source of funding. Meanwhile, 21 per cent of millennial home owners moved back in with their parents to save for a deposit.

Schwartz, who was one of the conference’s organizers, added that Canadian seniors suffer from a lack of source that provides impartial advice.

“You can talk to your bank. But if the advice is free, it’s probably not unbiased,” he explained.

A study conducted by Equifax Canada and HomEquity Bank last year uncovered that 16.5 per cent of people aged over 55 were carrying mortgages. The average mortgage balance in this demographic swelled from $158,000 in 2013 to $176,000 in 2015.

Bankruptcy trustees Hoyes, Michalos & Associates Inc. have warned that seniors were the fastest-growing risk sector for bankruptcies.

“The share of insolvency filings for debtors aged 50 and over increased to 30 per cent in our 2015 study compared to 27 per cent in 2013,” the Ontario-based firm warned, adding that on average, debtors aged over 50 held unsecured debt of over $68,000 (over 20 per cent higher than the average debtor).

 

Source: Mortgage Broker News – by Ephraim Vecina15 Aug 2017

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How to choose the right home for your budget

how-to-choose-the-right-home-for-your-budget

As a first-time homebuyer, affordability is an important factor when purchasing the right home. Wondering how to find the right home for your budget? Try our three-step plan for determining how much home you can afford, so you can choose – and successfully close on – the right home for your lifestyle and price point.

 

Step 1: Dream it 

It’s easy to get caught up in other people’s ideas of the perfect starter home – design magazines and TV programs sell you on what’s hot now. Ignore the hype and sit down to itemize what’s most crucial to you and your family. Make a list of your top priorities, so you can find the right home for your budget.

Here are some key issues to consider.

Transportation

Do you need easy access to public transportation? Is dedicated parking for your car essential, or will street parking suffice? Would a secure bike locker be crucial to your commute

Recreation

Do you need a walkable park for your kids or dog? Would an on-site gym help you manage your hectic schedule?

Space

How many bedrooms do you need now? What about three to five years from now? (That is, is a baby on the horizon?) Do you need a home office for your side gig? Is a big, open-plan main floor essential, given your high-volume entertaining?

Lifestyle

Do you have the time and inclination to sacrifice hours each week to maintain a house and yard? Would you rather come home after work to a turnkey property each night? Do you want a condo with all the amenities, or would you sacrifice bells and whistles for a lower maintenance fee?

Can’t find the perfect home?Why not build yourself? Build a custom home and finance it with as little as 5% down. Find out how

Look over your list and differentiate between the must-haves and the nice-to-haves. Chances are, you might not find your entire wish list on a starter-home budget, so it’s important to know your priorities.

Step 2: Crunch some numbers

Just as important as knowing what you need in a first home is knowing what you can afford. Price dictates not only how much home you can buy but also what neighbourhoods you should be looking in.

Sit down with your partner to assess your income, debts, savings and investments, so you can anticipate how much money will be available for a down payment, and how much you can afford to pay each month in home carrying costs (mortgage payments, taxes, heating, etc.).

how-to-choose-the-right-home-for-your-budget

Work out the monthly budget you’ll need to cover your responsibilities as a new homeowner, and start living on it now, so you can see how sustainable it is. If you find that it’s cramping your lifestyle, you will have to reassess whether homeownership is right for you, or consider a lower-priced home. 

Step 3: Assemble your real estate pros 

Once you’re ready to buy, build your real estate team: a REALTOR® or real estate agent, a mortgage specialist, a home inspector and a real estate lawyer (or notary, in Quebec). These are the pros you’ll count on to get you the keys to the right home for your budget.

Your first point person is your REALTOR® or real estate agent. Be forthright about your priorities and budget, as well as the neighbourhoods you’d like to live in. A REALTOR®’s insights are priceless, especially as they pertain to affordability. BONUS: A good REALTOR® will have the inside scoop on up-and-coming neighbourhoods that offer more bang for your homebuying buck.

The mortgage specialist is your next priority because mortgage pre-approval is essential in today’s real estate market. While it’s useful to attend open houses and check listings beforehand, most sellers won’t consider offers from potential buyers without pre-approval. Your mortgage broker will also have real-world insights into affordability, so tap into that resource early.

Next, have that home inspector on speed dial to ensure that any home you make an offer on is a home you can afford – without any major hidden costs (such as faulty wiring, asbestos or termite damage in need of remediation).

Finally, a real estate lawyer (or a notary, in Quebec) will ensure that things run smoothly with your real estate transaction, including researching the title, checking whether there are liens against the property, and verifying the accuracy of legal descriptions of the property. The lawyer also makes sure that everyone is paid appropriately, so you can take ownership of your first home without any financial bumps.

 

Source: Genworth – HomeOwnership.ca

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Millennials not giving up on the detached-home dream, despite soaring record-high prices

There are options for that detached home for millennials, but they ultimately mean sacrificing something along the way.

Millennial are not giving up on the dream of owning a detached home, despite national prices soaring to record levels, buoyed by average prices that routinely reach seven figures in hot markets.

Even in the face of what the Toronto Real Estate Board says is a “troubling trend” in its market, Generation Y will not be deterred from their dream home, with 51 per cent of the cohort planning to purchase a detached home in the next two years, according to a survey by the Ontario Real Estate Association.

But planning and purchasing must be two different things, because the barriers to entry to the detached home market in Ontario have never been greater, at least in the city of Toronto where the average detached home sold for just over $1.2 million in July, according to the Toronto Real Estate Board.

Even accounting for the larger geographic region of the Greater Toronto Area — meaning,  a trip to suburbia — the average existing detached home sold for an average of $952,983 in July, according to the TREB numbers, released Thursday.

The real estate industry says provincial regulations encouraging density and choking off developable land has created the imbalance between supply and demand in the low-rise market, including detached homes.

“Housing policy is now top of mind for all levels of government. Policy makers need to be focusing on solutions to the sustained lack of low-rise inventory throughout the GTA,” said Larry Cerqua, president of TREB, in a statement. He refused a request for an interview.

Given the state of the market, what exactly makes this generation — defined in the OREA study as the group born between 1981 and 1992 — think they will actually be able to afford anything but a condo, let alone a detached home?

“I think what we are seeing in the research, there are a few factors. It’s obviously stage of life, as needs change, your requirement for a home changes,” said Fahed Malik, the director of marketing communications at OREA. “There is a need for a larger home and a detached home can give you that practicality.”

Part of what also drives them is this idea that real estate will always be a good investment. The survey, which was conducted online by Ipsos between May 31 and June 2, 2016 and is considered accurate to within 3.5 percentage points 95 per cent of the time, finds 77 per cent of Generation Y thinks real estate is a good investment. A year ago only 70 per cent felt so.

The desire to have the dog, the garage and 2.4 kids is strong no matter what generation you are talking about

Why wouldn’t they think real estate always pays off — property prices have had only one real dip in the GTA over the past 20 years, which is most of their adult lifetime. Even the Great Recession barely impacted prices between 2008-2009.

Ontario millennials are hardly alone in their  desire for a large, detached home. The demand is just as strong in British Columbia, which has seen the benchmark price for detached homes climb to almost $1.6 million in its largest city.

The provincial government in Victoria won’t let the dream die easily, and last month announced a 15 per cent tax on foreign purchasers in Vancouver in an effort to control prices in a market where the supply of detached housing is finite. Prices are destined to go higher in a market where supply is outstripped by demand, even if you do more to limit that demand.

There are options for that detached home, but they ultimately mean sacrificing something along the way. Elton Ash, regional executive of Re/Max of Western Canada, says that means a resurgence of interest in suburbia.

“The desire to have the dog, the garage and 2.4 kids is strong no matter what generation you are talking about,” he said, pointing out that detached home affordability question is not a pan Canadian issue. “I just did a road trip in Manitoba and visited a community 35 kilometres north of Winnipeg and the lot cost was $45,000. But it’s the same result as you move out of city cores, prices to get cheaper and that’s why bedroom communities are getting more popular.”

Living near the city’s downtown means downsizing your expectations. The OREA study didn’t ask people specifically where they would be willing to live to afford a detached home, but it’s now realistic for a person working in Toronto to live more than 100 kilometres away from her job.

The prices continue to drive that message home. Results from the Real Estate Board of Great Vancouver for July do show detached homes are pretty much unattainable for local residents, but the average attached home, which could include a rowhouse or townhouse, sold for $669,000 last month. That’s clearly more attainable goal.

Doug Norris, a demographer with Environics Analytics, said baby boomers are not retiring anytime soon, so the supply of ground level housing is likely not picking up. “They’re not moving until (age) 75 or so,” he said.

He says demographics drive demand for single family homes, but the reality of the economics is that means some level of compromise.

That same study from OREA found the second choice of generation Y buyers, after detached homes, was condo apartments at 28 per cent, followed by semi-detached at 18 per cent and row houses at 13 per cent.

Detached homes may be the first choice of that generation, but the reality of the marketplace means the percentages of those other options are going to rise — at least in Toronto and Vancouver.

Source: Garry Marr | August 4, 2016 2:31 PM ET

gmarr@nationalpost.com
twitter.com/dustywallet

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Hitched then ditched by marriage ‘predator’

Galina Baron married an elderly man named Charlie Juzumas with a promise he'd never have to go to a nursing home. A judge later said she had "unclean hands" after her son's name was added to the title of Juzumas' house.

Galina Baron, 65, married Charlie Juzumas, 89, with the promise that he’d never have to go to a nursing home. He didn’t know it yet, but he had just become entangled in a predatory marriage.

She promised to be a caring bride who’d keep him out of a nursing home.

When the wedding was done, Galina Baron left her 89-year-old husband at a Toronto subway stop.

Charlie Juzumas took the TTC home, alone. He didn’t know it yet, but he had just become entangled in a predatory marriage.

Juzumas was Baron’s sixth or maybe eighth husband. She had trouble remembering them all, according to a 2012 Ontario Superior Court judgment filed after Juzumas tried to reclaim the house she took from him.

This story is based on Justice Susan Lang’s court judgment, an affidavit and interviews. Baron and her son, Yevgeni, refused to comment.

Juzumas was the husband who got away, but it was a precarious escape.

When Baron married him on Sept. 27, 2007, the 65-year-old bride had been offering caretaking to vulnerable widowers with the expectation of a mention in their will, according to the judgment.

Age was not Juzumas’ weakness. He did yard work, planted flowers and seemed entirely self-sufficient, although he once accepted a tenant’s offer to climb a ladder and remove storm windows. His vulnerability came from a fear of dying in a nursing home.

It’s unclear if Baron knew this when she knocked on his door in 2006. Both were born in Lithuania, 24 years apart. Baron spoke the language of his home country and offered housework.

He was reluctant but she kept coming back. As her visits increased to three times a week, he started to see her as a saviour who’d keep him at home.

Juzumas’ wife, Malvina, died a decade earlier and they had no children, but his memories lived in this house. It was a three-storey Victorian, with stained-glass windows near the west Toronto neighbourhood of Beaconsfield.

Baron pushed for marriage, saying she merely wanted a widow’s pension. She clinched the deal by promising he’d never go to a nursing home.

The day before they married, Baron and Juzumas went to see a lawyer named Stan Mamak in the Roncesvalles neighbourhood. The court judgment detailed Mamak’s actions.

In a recent interview, Mamak said he did his best to independently represent Juzumas’ interests and believed the elderly man was a willing participant. “Just because someone is old doesn’t mean they are infirm,” he said.

Without meeting Juzumas separately to ask his wishes, Mamak wrote a will making Baron the sole executor and beneficiary of his estate, the judgment found.

Baron never did move in, but she spent her daytime visits berating him, according to witness testimony, the judgment said. She got joint access to his bank account. He paid her $800 a month for housekeeping and she took all but $100 of his tenants’ $1,300 monthly rent, said the judgment, which found Baron had “unclean hands.”

According to her affidavit, his new tenant, Pamela Detlor, studied Juzumas’ reaction to Baron. The moment Baron marched through his front door, Juzumas’ shoulders slumped, Detlor said. He was so afraid to speak that she initially thought he was mute. Later, he’d confide his troubles in Detlor saying, “I am a stupid old man,” according to the judgment.

Two years after the wedding, Juzumas realized he’d made a mistake, both in marriage and in the will that gave Baron his estate. He went to a different lawyer who wrote a new will. (The judgment doesn’t say why he didn’t choose Mamak, the original lawyer who wrote the first will of their marriage.) Baron would now inherit $10,000. The rest was bequeathed to his niece in Lithuania. The bulk of his estate came from his home, worth roughly $600,000 in 2009.

Baron soon discovered this act of rebellion. She went to see Mamak. The judgment states that Mamak believed it was Baron who was the victim, a “wronged, vulnerable spouse/caregiver.”

Mamak told the Star that Baron described Juzumas as a violent man, saying she claimed he threatened to cut her in half with a sword.

“In retrospect, I feel she was probably trying to manipulate my image of her — that she was an innocent victim,” Mamak said.

Together, Baron and Mamak came up with the idea to transfer the title of the house to her son, Yevgeni, the judgment found. Mamak said he improved the agreement, letting Juzumas live in the house with his name on title until his death.

A meeting was arranged to add Baron’s son Yevgeni to the house title. That morning, 91-year-old Juzumas ate a bowl of Baron’s soup, becoming “dizzy, as if I’d taken a strong drink,” he later told court.

Tired and disoriented, Juzumas signed the papers, giving away his financial security to a young man he disliked. The judgment later found there was no evidence Mamak spoke to Juzumas without Baron in the room, nor did he tell him the new agreement was “virtually eviscerating” his recent will. (Mamak said he believes he spoke to Juzumas independently but has no notes to prove it.)

When Juzumas learned of Baron’s ruse through a legal followup letter two weeks later, Juzumas’ long-time neighbour, Ferne Sinkins, drove him to the lawyer’s office. Baron arrived a few minutes later, but was told to wait. Juzumas emerged from his meeting with Mamak saying he was told the transfer was “in the computer; it can’t be changed,” the judgment said.

He returned the following week with the same request. Again, Baron appeared — an “unexplained coincidence,” the judge found. (Mamak denied tipping off Baron, saying she was probably following Juzumas.) This time, she demanded a new will and power of attorney over his medical care.

At home, his tenant thought he was “doped up.” His neighbour questioned the large gash on his forehead. Juzumas said he passed out, adding that Baron told him he fell down the stairs. He didn’t want to go to the hospital, fearing he’d be taken to a nursing home. During a rare evening visit, Baron called an ambulance claiming Juzumas was sick. His tenant, Detlor, told the attendants of Baron’s abuse.

Questioned by hospital staff, Baron called Juzumas a violent, pathological liar who should be sent to a nursing home. Instead, staff sent him home where helpful tenant Detlor insisted he change the locks. The day Baron came to get a few possessions left on the porch, Juzumas lay flat on the couch so she couldn’t see him.

Juzumas took his case to court. Baron fought back. The judge gave him a divorce and reversed the transfer of his house, blaming it on Baron and Yevgeni’s “undue influence of a vulnerable elder.”

Two years later, Juzumas sold his home for $910,000 and, neighbours said, returned to Lithuania with his niece.

Source: Toronto Star  Investigative News reporter, Published on Sun Apr 17 2016

Galina Baron married an elderly man named Charlie Juzumas with a promise he'd never have to go to a nursing home. A judge later said she had "unclean hands" after her son's name was added to the title of Juzumas' house.

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Should You Pay for Your Child’s College Education?

College degrees lead to higher pay, greater career options, and — research suggests — longer lifespans. But parents with college-bound children may feel trapped by the skyrocketing costs of education, which can also last a lifetime.

If you pony up, you could risking your retirement. If you don’t, you could be risking your kid’s future.

Indeed, the average graduate leaves school with nearly $30,000 in student debt, a sum that will reduce their future retirement savings by more than $300,000, according to a projection by insurance and financial research group Limra.

Likewise, parents’ retirement savings are also getting put on the line because of skyrocketing costs. Nearly a third of parents in a T. Rowe Price study admitted they’ve made the risky choice of tapping their 401(k) plan to save for their kids’ college.

That’s a shortsighted move, said Sean T. Keating, a certified financial planner in Eatontown, New Jersey.

“You can always borrow money for college, but you can’t borrow money for retirement,” Keating said.

What do you do?

Finding compromise is possible if you plan ahead and follow the right order of operations, said Lazetta Rainey Braxton, a CFP and founder of the wealth advisory firm Financial Fountains.

“Middle income parents need to ensure their own financial stability first,” Braxton said. “It’s like putting on your airplane oxygen mask before you put on your children’s.”

Here are three key questions to ask yourself before you decide to open your wallet wide — or slam it shut.

How much can I afford?

One rule of thumb says that to maintain your standard of living, your savings at retirement should be high enough to replace at least 80 percent of your annual income each year, said Keating. Work backward from that assumption to see how much you can actually spare today, he said, also keeping in mind obligations like your mortgage payments and any other debts.

“You have to be aware of what you’d be sacrificing,” said Erika Safran, a CFP and president of Safran Wealth Advisors in New York. “Will you run out of money at age 75? You must also consider medical expenses and where you will live.”

In fact, many older adults end up forced to retire earlier than they expected because of illness or other unforeseen events, said Thomas Murphy, a financial planner in Dallas. So it pays to leave plenty of buffer room as you budget out any contribution to your child’s college funds.

Am I leaving free money on the table?

Make sure you are doing everything you can to free up easy cash, Safran said. Refinancing a mortgage right now could save you hundreds of dollars a month, for example. If you’ve done the math and realize you truly can’t spare much (or any) cash for your kid’s education, don’t just leave your child hanging.

“When you simply say you can’t pay, that can discourage a kid from applying to schools at all, since he or she might not realize you can actually get application fees waived,” Murphy said.

Instead, stay involved in the process and fill out the Free Application for Federal Student Aid — no matter what. Even if your family income is too high for your children to qualify for federal aid, simply having a completed FAFSA gives students the option to apply for merit-based scholarships and other grants a prospective school might offer.

Finally, remember that it doesn’t hurt to exercise a little patience: Consider asking for additional aid before the second semester, since money may have freed up because of first-semester dropouts, Murphy said.

What lesson will my child take away?

Not all high school seniors are academically or emotionally ready for college.

“For some, a year in the working world not only allows them to contribute financially but also gives them a sense of accountability,” Keating said. “It might also make them more reasonable in their choice of schools.”

Joining the military or starting at a community college before transferring to a four-year school are other options that can save money and give your kids extra runway to mature before college, Keating said.

Remember that, for your child, choosing a school is not just a financial or academic decision. “It’s also an emotional decision,” Safran said.

Try to keep an open mind. If your child is excited to start right away at a school on the high end of your price range, you can always make your financial help conditional upon their academic performance.

“You can promise you’ll help them pay back their loans after graduation if they get good enough grades,” Murphy said.

Source: 

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Toronto Homeowners Get $8,500 Richer Every Month, While Condo Owners Get The Shaft

Bicycle Bob/Flickr

Forget working. The real way to accumulate wealth is to buy a single-family house in Toronto, and wait.

OK, that’s bad advice. But given what’s been going in Toronto’s housing market, you can be forgiven for coming to a conclusion like that.

If you own an average single-family home in Toronto, your net worth has been growing by about $8,500 a month over the past year.

According to the latest numbers from the Toronto Real Estate Board, a single-family home in the 416 now averages $1,053,871, up 10.7 per cent from a year ago. Break down that increase by month, and you get around $8,500.

But in yet another sign of the growing gap between condos and houses, Toronto’s condo dwellers aren’t seeing anywhere near that kind of wealth growth.

The average Toronto condo is now worth $418,603, 5.6 per cent more than a year ago. That works out to a wealth gain of $1,925 a month. Condo owners are growing their wealth at less than one-quarter the pace of homeowners. In the 905 region around Toronto, condo owners are adding only $637 per month in wealth.

Condos just aren’t seeing the same rate of appreciation. While standalone homes in Toronto have grown by 34.8 per cent in price over the past three years, condo prices have gone up only 10.9 per cent in that time.

Say hello to the new face of wealth inequality in Toronto, where owning a back yard is a pass to riches, and owning a balcony is a pass to condo fees.

But so what, you may ask. This value is tied up in the home, it’s not like people can live off it.

Well, yes and no. A growing number of Canadians are taking out home equity lines of credit against the value of their house. The higher the house value, the more they can borrow, and some experts are getting worried Canadians have borrowed too much this way.

And there is also the wealth effect: People change their behaviour when they feel richer, generally buying more than they otherwise would.

This effect seems to be strong in Canada right now. It certainly helps to explain whyconsumer spending held up in Canada this year despite all the talk of recession, and why imports to Canada are strong even while exports are flailing.

So the money may be stuck in your home, but its effects on the economy are real.

Here’s a breakdown of how much wealth Toronto-area residents are accumulating per month off their real estate.

Single-family homes in Toronto (416):
$8,491 in wealth per month (avg. price $1,053,871, up 10.7 per cent in a year)

Single-family homes in GTA (905):
$6,404 in wealth per month (avg. price $732,852, up 11.6 per cent)

Condos in Toronto (416):
$1,925 in wealth per month (avg. price $418,603, up 5.6 per cent)

Condos in the GTA (905):
$637 in wealth per month (avg. price $307,295, up 2.2 per cent)

Source:  |  By  Posted: 10/06/2015 12:29 pm EDT

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