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Join Date: Jan 2008 Location: wa state
Posts: 9
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 |  Can lenders lend to developmentally disabled without power of attorney present?
EXPLAINATION: I am currently a guardian to a gentleman named Richard who is developmentally disabled since birth. His income is only currently $510 per month SSI. He was married to his childhood sweetheart in the early 1970’s (She also is developmentally disabled since birth, age 6 years, and also paranoid schizophrenic and draws an income of $528 per month). Richard has the mind of a child. He was helped to purchase a small home in the 1970’s (less than 900 sq ft)by his wife’s grandmother but in the late 1990’s was coerced by one of his family members to sign papers to get a mortgage against the home which was free and clear at the time (what happened to the money ?????? That family member is now deceased.)
The mortgage was for $45,000 a 30 yr fix at 11%. His home was only worth (TAV…$59,000) at the time. The mortgage payments were paid in part by his SSI ($477 per mo at the time) and wife SSI($493 per mo at the time) and a job he does 3 weeks in the spring and 3 weeks in the fall at our local fair grounds where he makes minimum wage emptying garbage during the fair season. Their income and bills were over seen by his Mom until her health/age forced her into a hospital in late 2000. Prior to her hospitalization she helped him open several charge accounts too, Sears, Nordstrom’s, MasterCard, Capitol One Visa and an American Express credit card. He immediately charged them full (how he ever got the credit to begin without a co signer???? I have NO idea). His wife has never signed a contract, used a credit card or is even aware of their financial status. Her mental illness does not allow her to comprehend what is happening around her. She hides in the bedroom if someone comes to the door and talks to imaginary people constantly. She and Richard are married on paper but are not married in any other way. They live very separate lives and he/his Mom always took care of bills, shopping, finances ect. on her behalf.
He, Richard, having the mind of a child, (about 10-14 yrs depending on topic discussed but can not do simple math or read/comprehend above 4th grade level) was so excited each time he filled out an application because he got a free T-shirt, $5 cash or a hat or gift of some kind….he had no idea what he was really doing. As stated before, he charged the cards to the limit and the payments were more than he and his spouse were making on SSI. He was sinking fast. Especially after the Mother was hospitalized and could no longer help with repayment. He was left alone, retarded and unable to take care of his own finances .
I was asked by his Mom to become his Power of Attorney in 2001. Once that happened and I had some (stress LIMITED) insight into his financial situation I immediately helped him refinance to a 30 yr fix at 7% and borrowed enough to pay off the ALL credit card debts. The loan was for $59,000 and his home was appraised for less (at the time) but we complied with the lenders desire for improvements with some of the loan money. The new appraised value AFTER the improvements was $69,500.00.
As his POA in 2001 I had limited control over his finances and before long he had opened more accounts (with the help of a new girlfriend who also is developmentally disabled and garnishment proof. Almost everything charged was for her) and was doing the same thing all over again! Basically, I could only scold him and try to repair the damages. Eventually, I got him to stop opening charge accounts but there was already financial damage done. He still owed the first mortgage which was manageable and current but now had new credit card charges which were well over his income ability. I helped him budget and pay them so he wouldn‘t get into more trouble financially. I didn’t have internet access or the income to speak to an attorney for advice. So I just tried to keep him afloat but several of the credit cards got too costly and I had to allow the collection agencies to take Richard to court.
After we got into court and proved Richards mental disability, as well as low income, the judge always ruled in our favor and the credit card companies/debt collectors were forced to DROP all debt without prejudice. I have ALL of them documented, even a letter that was sent by American Express saying they wouldn’t take Richard to court to collect on his American Express charge card after reviewing the previous losses in court by other credit collectors. I got all his debts dropped one by one over the next 5 years because the courts and creditors agreed he can’t be held liable. Everything looked like it was going well until 2006, his Mother passed away, and soon after, he came to me and allowed me to see ALL his monthly bills (I thought I had them all under control already!!!) and to my horror I found out that American Express Home Equity coerced him into signing a contract for an equity line of $25,000.00 and he had also maxed that out behind my back between 2001 and 2002!!! (again most of the debt incurred was to impress his girlfriend).His Mom, via long distance had been helping him pay it off without telling ME until her death in 2006!!! It was a 5 year interest only.
I didn’t know what to do and had such limited legal rights to access his private information or even get American express to speak to me that I was forced to just pick up where his Mom left off with payments in order to keep him from going into foreclosure.
During this time I petitioned the courts to be his Legal Guardian which allowed me the right to start controlling and accessing all his financial obligations. Upon review, in Nov 2007, the state of Washington agreed he was not capable of living on his own or handling money without a guardian. He can not sign/enter into any financial obligations or contracts without me present or without the courts over seeing what is happening too. I am also a silent guardian to his wife since their finances are combined through marriage but the courts will not allow me to be a legal guardian to both.
All his/their other bills and his 1st mortgage are current and have never been late.
Since becoming Richards guardian I have been in constant contact with Ameriprise Bank (the company that purchased Richards account from American Express July of 2007). I explained why I question the validity of the debt and have given them all the proof that they have requested in order to review the account (proof of organic brain disorder since birth, court findings, dropped debts, letter from American Express dropping credit card debt, lack of income, proof of blindness, proof I was his POA at time of signing but was NOT present when he agreed to the American Express home credit, ect) I have faxes, emails, registered letters, phone records of every correspondence/contact I have had with Ameriprise since the dispute began.
Ameriprise, without ever allowing me to speak with more than a courtesy rep. finally gave me an ultimatem today, March 11, 2008. AA---I either accept a charge off (which still allows Ameriprise to steal any future equity Richard and his spouse will need for their nursing costs as they get older when the property sells). I REFUSE to allow a charge off. They NEVER should have been given the mortgage and furthermore his spouse NEVER signed the papers (Richard signed for her) but they are still including her in the debts and claim she did sign the papers.
BB----or I can reduce payments for 2 years as interest only and then start the whole nightmare over again at that time.
CC----or they will file for foreclosure immediately
MY 1st QUESTION: In 2001 his home was only worth $69,500.00 and already had a 1st mortgage fixed 30 yr for $59,000 at 7% interest. A---American Express had a representative come into my clients home and give him papers to sign without his Power of Attorney present.
B---Seeing that he is basically blind, unable to read and also knowing he is retarded (You can’t miss it. He has the look and just simple conversation tells you he isn’t all there).
C---- there was NEVER (and still isn’t) enough equity to afford a $25,000.00 loan to be approved.
D----He only had an income of $477 per month and a non participating spouse whose signature was forged with income of $493 per month. A current 1st mortgage with payments of $586.17 on a monthly combined income $970 per month disability.
They weren‘t even getting food stamps at the time and still had all utilities, property taxes, food, household goods and clothing to purchase each month !!! They were already at starving level when American Express gave them the loan!!!.
Was this loan legal?Does our country allow peditors to loan money to children???? They are both severly, mentally disabled.
If not…how do I fight it? Ameriprise is threatening foreclosure since I am now 90 days behind in his payments.
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