Over Fifty, Overdrawn

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Commenter: Damon
What is happening to seniors, via predatory lenders, rising costs and fixed incomes is frightening. As an individual in my mid-30's, absent home ownership, I have grown up with predatory lending, escalating credit debt and the prospect of no return on social security investments. Only recently due to good fortune have I begun investing in retirement only to see huge losses in my investments due to the financial crisis. The generations following the baby boomers seem to have no real hope of ever retiring. Is the American Dream dead?

Commenter: Caroline Furnari
Many, many thanks to PBS, David Brancaccio of NOW and Bill Moyers for the highest standard of investigative journalism that is sorely missing elsewhere in the media. We are loyal viewers.

Sincerely,
Caroline

Commenter: Miriam Null
I see my hard-saved assets just fading away as I wonder how I will pay for staying in my lovely but pricey CCRC in CT. No more trips to CA to see my family,no vacations with old friends,far fewer donations to charities. I will not be helped by the current stimulus package because I do not work--will tax relief help me? I have always been ver thrifty, paying all bills by the month--a lot of good it did me! I am furious at those who overborrowed,at the bankers who made this mess possible and at the regulators who turned a blind eye. Thanks a lot, boys!

Commenter: arthur sank
simply put, I and millions of other seniors are now
afraid to gamble on the stock market and have placed all of their hard earned savings in to safe, gov't.
backed C. D.s. Well, last year interest was from 5.5%t
to 6%. In the past year they are hard to find at 3%
and if one saved all his life to a $400,000 balance,
his interest earnings have been reduced by $12,000
which hurts badly when his basic living costs increase
daily. Wall St. and banks are handed many billions
freely doing nothing honest to earn it and refuse to
even tell what they are doing with it. Sounds crappy
to me but I'm not too surprised. Think of people who
are losing their homes, their jobs, and seniorsDojardin cost losing
their income and not Wall St. and millionaire bankers
whose pockets and stomaches are full.
Arthur Sank

Commenter: Whtie Crow
To the starving man, fasting makes sense.
If we can come to the point where we aren't dependent on our material comforts - to adjust our attitude that we are not deprived but can move into a higher mental state where we become generous, become strengthened by our own sacrifice, we will take a giant step forward for mankind.
It bothers me that the elders of the tribe aren't leading the way, but want to act like petulant children clinging to their drugs. Don't complain about a drug problem in the country without counting these weak examples among the seniors as they are addicts, pure and simple.
Years ago, they had opium dens in China where the elderly spent their days reclining on couches stoned out of their minds. Maybe that is what these whiney elders really want - to fade in oblivion at the expense of the whole culture. They disgust me!

Commenter: Rosie Stephens
A powerful show, thoroughly presented though sad to watch.
Wish your show was for full hour like David said it would be a couple of y ears ago when he talked to OPB supporters in Portland, OR.
What happened to that?
Oregon Legislature fixed the problem with the outrageous interest rates charged by the PayDay Loan companies. Most have packed up and left the state. The Lieut. Gov in S.C. and the elected officials could fix the problem there if they wanted to.

Commenter: Chuck
What is going in the USA is nothing short of Financial Terrorism. Which has done more harm to the USA that 9/11. What we need now are strong Regs. and prison time for these trrorists. The sad fact is these are Americans that have done this to us.

Commenter: Lynne Findley
Thank you for airing our problem. When the lady said, "It's a rainy day". Amen. We too did everything right until my husband was laid off at the age of 59 last September. We couldn't afford COBRA and our mortgage payments. It was health care or the streets. No one is hiring anyone now...especially people over the age of sixty.

Commenter: pat
I am in my 50's and have seen half of my 401k disappear this last year. I also lost 90% of my money when the dot com boom busted. So I understand the pain and fear of losing money. So much for self pity. Now the real question what is the path out of this mess - for me, and for the country?

The solution it sounds like our country is looking for is more of what got us into this situation. The desire for the lottery. We want to hit it big. I did, that is why I bet so much of my money on the dot com companies (and telco's) hoping to hit it rich. Others did this on housing, feeling that they could buy something they knew they could not afford, or that they could refinance, or take equity loans out. And yes, on the selling side people will alwasy take your money if you are not careful with it. Now we want the goverment to bail out - corporations who did not follow due diligence in managing loans - or the otherside of the coin, we want goverment to bail us out as home owners, or equity borrowers who did not think about how we would pay off the loans.

Well folks, as they keep printing money to "pay us" the money becomes worth less and less - hence the cost of things go up.

The true answer lies in learning to live more simply and to save money at a reasonable level. Being cautious when a deal looks too good to be true. And perhaps at the regulation level, ensuring that there are clear rules for lending behavior from corporations (yes you need a down payment, and to be able to show that you can afford the loan - duh).

Commenter: Jeanine
I thought this week's show was great. The people were so interesting and their stories were so representative of a situation affecting millions of seniors with similar problems.

Commenter: Barbara Grant
I'm 63 and having a problem finding a job in Louisiana. I retired from teaching on disability (after only 8 1/2 yrs.)in 2003 and got my masters degree in counseling in 2004. I have a part-time job with a local mental health agcy. but need full-time work. La. is such a social worker state that, if the agcy. takes medicare, one has to be a social worker, not a counselor, even though I can do the same work.
Another problem in Louisiana --- I am on teachers' retirement and receive only $592 per month and cannot receive social security even though I put into social security for many years before I became a teacher. I will never be able to live on only one as I have not put enough into either one individually. Does this mean that I will have to work until I'm 90? I have no retirement as there was no 401K when I worked in the '60s or '70s, and I worked sporatically through the '80s as an independent contractor and had no savings.
How can I get around all of these restrictions?????

Commenter: Jim Rankin
The bottem line is not that old and poor and ignorant are being ripped off, it is that we have never had a real safety net. Medical is killing people, pun intended. Japan provides medical for 8% of gdp and everyone is covered. You know the facts. College students are not graduating with a diploma and a huge bank debt. New doctors here cant afford to be regular Doctors. Even poor Cuba trains Doctors for free. The superrich are ripping off the system. After reimposing $ cost averaging for those who earn a lot over a short span like athletes, we must raise taxes dramatically on those who year after year make piles of money. Ie the Bush family. In Norway for example executives dont make more than 2 times trained workers generally. I am sure there are exceptions, but I have been told by Norwegians it is the rule.
We need to change many things, but the War on Drugs is not working. Why do we persist? This will take a drastic overhaul of how we deliver drugs and treatment to addicts. Those who fail to take treatment can be sent to camp farms. Old U.S. Army bases most likely could serve.
We need to integrate the young men who peddle drugs into the system. Pan o Palo as they say in Spanish. Bread or the stick. Half of the prisons in the U.S. could be turned into schools. Why dont we farm out the most violent criminals to Mexican prisons. We could save billions.

Commenter: Karras Bommer
The only true work-related problem older employees have is more physical interferences like reduction in hearing and eyesight and more back problems. If we have access to medical care, to dentists and eye doctors and general practitioners, we can and are contributing members of society without need of either pity or care.

Unfortunately, most people I know who are my age (60) do not have access to medical assistance of any kind.

Commenter: Sherri
Thank you for this program, it is so relevant to what goes on in the check cashing industry. We have had to save my Mother in Law from the check cashing vultures. We are a typical couple whose children have all been raised, attended college and started their own lives, yet we now find that we have to care for our aging parents. My Mother in Law had been running short of money due to visits to the casino as well as her daily expenses. She is on a fixed income and had actually gone to Moneytree to cash her military retirement check to put money in the bank to cover her overdrafts, she no longer understands the concept of interest rates nor fees. She has been charged over 300% for these loans and was unable to afford necessities. We had found in her checkbook copies that the people at Moneytree were even writing the checks and having her sign them. We were astonished! In spite of her loosing her independence, we have had to take away her finances and show her that it was costing her hundreds of dollars a month to cover these payday loans and overdraft fees. She could never catch up! I think that although this had to take place in order for her to survive and not be evicted, and has taken away her independence, it should work. There should be a law that prohibits loaning on government checks. All of her retirement checks and Social Security are government issues. They should also not allow this type of payday loan business in states that allow casino gambling, it just makes it easier to get into trouble.
Thanks for such a rewarding program (as always!).
SJ

Commenter: Ron
This show was not about the plight of the elderly; it was about the plight of the poor; most of whom would prefer to set at home instead of go out and work for a living.

Supposedly, there is not enough money in the world to make all the poor wealthy, so what are the rest of us supposed to do about it?

At least in the USA, where citizens over 65 have built the country into what it is today, have paid taxes all their lives, and have paid into Social Security and Medicare as long as they have existed, there is something citizens under 65 can do.

The current generation of USA citizens under 65 can support the USA citizens over 65, with a living income and complete medical care.

Instead of giving bailout money to banks for nothing, the USA government could stimulate the economy by giving money to seniors. This could be done by raising Social Security payments to a median wage level, and by using MEDICARE to provide complete universal health care to USA citizens over age 65.

Commenter: Bryan
I just saw the "Over Fifty, Overdrawn" episode. I remember a payday loan storefront in Champaign, IL, around the year 2001, and seeing how arrogant and self-righteous the manager of that outlet was about his clients. I worked nearby and was a friend of a friend of this manager, and we would often have backroom discussions about business, clients, and, yes, getting rich. While I was somewhat of a captive audience, I listened carefully to the observations and opinions of these guys. What was particularly fragrant was the contrast between how great it was to be in a growing business and how much of the responsibility was on the borrower when the loan went into default. The losses of struggling people became these guys' gains. And of course, this storefront was across the street from a large employer of people from a lower socioeconomic echelon. Of course, of course...

This show made me angry, not at its producers, naturally, but at the people who have brought this on.

How will we restore the balance that has been destroyed by these people? How will we put this behind us? Huh? Dang it.

Commenter: noreasontoworry
Viewing the presentation about retirement problems, I am confused are not matching people who are desperate with investors looking for a reasonable returns. A simple rate of 6% will cut the debt by 2/3rds immediately and provide the investors with returns that are a lot higher than any investment in the market today.

Commenter: Doug Knott
Although I live in Canada, I see the same problems occurring here to a somewhat lesser extent. We have the government heal thcare program which helps tremendously with basic healthcare. Nor were we able to get loans without collateral as easily as in the US and that simple law or practice prevented some from becoming over-extended. But we have the same credit card problem and the same unfair lobbying practices at alllevels of government.

Commenter: Thomas Hardy
The best way to help the seniors and poor, and get money to the ones who need it and into circulation tne fastest is to give them the money directly to pay their real estate taxes. They have homestead tax credit for the very poor, but that is all. Giving it firstly to the governors, is giveing it just to special interest groups, even if it has stipulations. Better roads and rails to ride on is nice for us elderly, but not a first priority need.

Commenter: Jack Royko
I have a suggestion to help seniors --- stop taxing social security benefits.

Commenter: Nico
I watched this tonight out of curiosity as I have never seen NOW before.
Wow! I have to say I was disappointed about the main thread of the show being - 'it's not the fault of the consumer but the fault of the capitalist'.
After beating us in the head for almost an hour about the 'mean, predatory capitalist', the reporter made the obligatory 1-1/2 minute slot to ask "what about those that would say, it's the consumers fault' (wink, wink).
This is the mentality that got those same people (and the rest of us that didn't ask for it) in trouble to begin with - "I want govt. to take care of it."
It's time for Americans to suck it up and take personal responsibility.

Commenter: x2
In this episode, there was this lady who was in debt to payday lenders. She kept paying and taking out more payday loans b/c she feared going to jail.

Eventually some laywer told her to CLOSE HER CHECKING ACOUNT. Then the lawyer when to the payday lenders and told them to back off.

Does anyone know why the lawyer told that lady to close down her checking account?

Commenter: Noel Fernandez
Your segment on Retirees was not done with satisfaction, first, Nobody in South Carolina was asked whether they voted for the Democratic govt. The Governor was let off the hook with some hanky panky excuses, WHY?,the old man said that he would sell his home to buy a trailer and travel, was he running away from the problem. America is the only country where you as a citizen is not allowed a place of residence. Being the only home you possess should be a policy for home buyers and not for the rich to keep buying and selling houses just as they please. This is the reason citizens in this country are not by the people, for the people and something else. I think the Constitution should be written again, because the laws were not adhered to even in the early days. They still owned slaves after the constitution was written. The lawyer had the best answer but will somebody make the government responsbile. The land of the free and home of the brave, Is'nt this a mockery?

Commenter: Janet Hudgins, Vancouver Canada
Can someone answer this: why don't the mortgagors rewrite the agreements with the original interest rate--which apparently everyone could afford (before they lost their job). At least the mortgagees would have a home and all those empty houses would be taken care of. I have asked this of a few members of financial institutions but have had no response and I really would like to know. Or is it a stupid question?

Commenter: Charlene Fitch
I agree with the comment that we must put our earrings on and keep on pushing toward a solution to our financial problems as older Americans. We must stand by each other, encourage each other and speak to our representatives in government, AARP, couseling, retirement, financial institutions, etc., until they clearly see how everyone is being affected by our senior financial difficulties. All the help we can get, is all the help we should receive and use in attacking our financial issues.

Commenter: Lance Lambert
I saw the episode and thought too much attention was given to the "scams are out there" side. It seemed to use the "fear" factor more than it actually is. Older citizens are constantly being scared and I think that reinforced the issue. Seniors are capable of and should take the responsibility to think for themselves. Too many are suseptible to fear.

Commenter: Tod Christiansin
Nice try for unbiased "liberal" reporting on this one. You have taken the most massive public fraud ever perpetuated in American history (under George Bush), and shifted the blame from amoral, corrupt bankers, to feeble minded, irresponsible seniors. What?! Oh, it's ok, because it's legal(???) ... remember slavery? Yeah, legal at the time, exploiters. You are LIARS, perpetuating a LIE! Who is paying for this propaganda?! Why aren't you exposing the real crooks? Who are these people making OBSCENE amounts of money, at the expense of regular, HONEST, hardworking folks? WHO! Why don't you tell their story? Hmm? Because they would be exposed as the ruthless, greedy criminals that they are? There are plenty of stories out there, of bankers, or so called, "loan officers," making loans they knew would default. Where is that story? Where is the story about a banking system with a Gambling Addiction that is supposed to justify, "free market" profits? I dare you to run this story! Peoples lives are being ruined! These enemies of the public must be brought to JUSTICE! by the way my Recaptcha code is: Alliance Fulfilled. very subtle. hissssssss
The Truth will be known eventually.

Commenter: Lisa
The story about seniors struggling to hold on to their homes broke my heart. If someone wanted to help with a small donation, how would they go about doing that?

Thanks,
Lisa Matchette
Seattle, WA

Commenter: Gomer McFlarp
I don't think you are doing poor and distressed people any favors by constantly reinforcing the notion that all blame lies with the government or lenders or some South Carolinian Republican Lt Governor rather than the poor decisions they themselves are making.

How does someone buy a house many years ago for 78k refinance and now have monthly payments of 2k? There is clearly something missing from that story. Did they take equity out of the house? Your story leaves me more and more synical about the actual agenda of shows like NOW.

Commenter: Gary E Andrews
'Professional lenders' made loans to millions of 'amateur borrowers.' Many borrowers had no idea the professionals were getting them to sign Mortgage agreements authorizing the lenders to increase the monthly payment at some unspecified time in the future. Their incomes and assets, documented in their loans, or not, gave no logical reason why that increase in monthly cost was reasonable debt for the amateur borrowers to commit to, or the professional lenders to expect could be paid back. It defied the logic of loan-making, and borrowing.

Why would professional lenders make loans the amateur borrowers couldn't pay back? Didn't they want their money back? Or did they see that they would be enabled by all these failures to seize real estate in robber-baron style, and quantity, and end up with far more 'profit' in the ever-increasing value of real-estate, than the loans themselves were worth?

And then, just gravy, if not part of the plan, the Congress would leap to its feet and throw $350 billion dollars of the amateur borrowers' tax dollars into the professional lenders' pockets, no questions asked. The lenders don't pay taxes. They have lawyers, Certified Public Accountants and friends in high places to get them out of it.

The amateur borrowers, their savings lost for down-payments and closing costs and incidentals to make their new homes livable, had no champion, not for years while this was happening, going back 5 or more years, and none when it became obvious to everyone in 2007-2008. Millions had already lost their homes, their newspapers filling week by week with more and more pages of 'Sheriff's Sale of Real Estate' ads, before it became the 'catastrophe' exposed in Wall Street.

Had some champion made magic and 'put out the fires' on Main Street, then Wall Street would not have had the 'heat' of bad debt, but good debt, the kind they used to want, the 'honest,' profitable kind that has worked for hundreds of years, the kind amateur borrowers thought they were incurring.

No, this wasn't an 'oops' moment when millions of amateur borrowers found 100's of thousands of professional lenders and all made millions of mistakes. This wasn't an epidemic of 'stupid.' This was a 'set 'em up; knock 'em down, robbery on a scale unseen in civil commerce ever in human history; but common in war.

Have we been 'made war on?' We have had no defense, not in our feeble, amateur individuality, not in our collective victimization, not from our governments, local, state, or federal, not from any supernatural deity. Forces conspired to make deliberate war on us, using the apparatus of our own representative Constitutional democratic government to 'legalize' and enable and enforce it. Our people have lost millions of battles, and millions more are projected to continue to lose before it's over, if ever it will be over. War is hell.

The 'loan shark' or 'usury' lenders cashing people's checks, and lending them money that frequently turns into, not a 'bailout' from the problem debt they already have, but a new debt added to the debt for which they borrowed hoping to escape, are another obvious 'battle' in this predatory war, legalized by 'our' government, our enemy empowered by 'their' government, to prey upon us.

Such predation, on such a scale, and embedded in the powers we would expect to defend us, is the stuff of science fiction. We are a long way down the slippery slope of chaos, fascism, designed by men and women of low character, low humanity, professional vampires sucking the lifeblood of amateurs, common people, and indifferent to our suffering.

We need, our survival demands, a defense from some quarter. Must we become outlaws, vigilantes, militias? Do we have to form new governments to write new, fair and reasonable laws, new law enforcement agencies to enforce those laws? Where can we find a champion? And what could any of these do now, after so many millions have been robbed and left to fend for themselves in the wasteland of the American economy?

Commenter: ACHIEVA2@VERIZON.NET
If you can hold out for about 4 months, get a reverse mortage. You do not lose your home, you can never be put out, your home remains yours for as long as you live, plus you never have to pay another mortgage, you have to pay only your taxes and insurance. Not paying your taxes is the only way you can lose your home. If your house has equity, you will have money in the bank.It is a program funded by the Federal Government, and it seems to me everyone follows the rules. It is not based on how much money you have, or your credit record. You must be 62 years old to apply, AND OWN YOUR OWN HOME.

Commenter: Stan Levin
The older couple where he had to take 10 drugs/mo. if they have less than $28,000 in net income they could get free drugs from all the drug companies.

Commenter: Judith Logue
You are definitely a public service. Thank you for tonight's show.

Commenter: James Robert Ross
In the NOW program, "Over Fifty, Overdrawn," where is the search for the answer to the question how older folks, as well as their children, came to believe that borrowing money is a solution to financial stress? Indeed, I wonder if the producer of this program also believes this myth.

Obviously one would have a heart of granite not to feel for the seniors you interviewed. Nevertheless, these folk, for good reasons or bad, borrowed money and spent it. Now they cannot repay.

So who really loses? They had the benefit of the money they borrowed and spent. The lender is left holding the bag unless the assets which secured the loan are worth as much as the outstanding balance. In the case of a mortgage many times the house is not worth what the owner owes on it. In the case of credit card debt no assets secure any of the loan, and the bank is out in the cold.

By the way I am 74 years old and recently had to loan one of my children and her husband $30,000 not because of any disaster such as medical bills but simply because the couple, which had earned a middle class income for 25 years, spent and borrowed in a very irresponsible manner.

How about a more balanced report on the financial stress many of us experience and the myths that lead us, both lenders and borrowers, to make foolish financial decisions?

Commenter: Jim Walker
I tried and tried to watch your show this evening. But the two ladies who mistakenly said we need to close GITMO and hinted that torture was wrong just were too much for me.

This is the kind of nonsense that keeps me from really giving the left wing a serious amount of consideration.

Patricia Williams - very disappointing guest.

Jim

Commenter: Edward J. Dodson
The financial hardship faced by so many of our elderly and minority citizens is a national disgrace. "Payday" and other predatory lenders add accelerant to a burning fire. The fire begins every 18-20 years with the beginning of a speculation-driven land market cycle. The last cycle has been characterized by remarkable low interest rates, and this low cost of borrowing is capitaized by market forces into even higher rising land prices.

As land prices skyrocketed in the late 1990s, the main secondary market outlets for residential mortgage loans -- Fannie Mae and Freddie Mac -- accommodated rising land prices by each year increasing their maximum loan amount. Thus, each year the funds used to purchase property were used to purchase less and less structure and higher cost land parcels.

In the commercial real estate sector, lenders ignored the determination that an investment yielded negative cash flows because appraisers found comparable sales showing that land values were continuing to climb. Thus, the amount provided as a loan looked conservative as a loan-to-value ratio.

What economists, bankers and most analysts ignored was the increasing stress escalating land prices were putting on profit margins for many businesses. Property owners kept passing on higher leasing fees for office space or retail space or other space based on what buyers were paying for land in advance of new construction.

And, in the residential sector, lenders (and the GSEs and the mortgage insurers) reduced or eliminated down payment requirements, increased maximum loan-to-value ratios to 100% and even higher, adopted greater flexibilities with regard to borrower creditworthiness, and calculated that the sale of foreclosure-acquired properties would involve only minimal losses.

These stresses reached the point of collapse at a time when government had abrogated its regulatory and criminal justice responsibilities because of other priorities and ideological blindness.

There are many urgent reforms needed in our systems of law, regulation and economic activity. One reform with both immediate and longer-term benefits is to prohibit any banking entities in which depositors are government insured from taking land as collateral for loans. Land values are already collapsing all around the nation. They will continue to fall for some time to come as recession deepens into a full-blown depression. Preventing banks from providing credit for land purchases will go a long way to keep land prices from draining the economy of a productive recovery.

Commenter: David
Your reporting was incredibly biased. The woman blaming "predatory lending", brokers and banks for not determining how much payment an individual can afford, instead of placing the blame primarily where it belongs--in the hands of the mortgagee--is absurb. We ARE responsible for our own finances and shouldn't depend on a bank to make sure we can pay our bills. This is primarily OUR personal responsibility. In addition, social security was never intended to fund our entire retirement--it was meant to be a portion of retirement funds, a basic subsistence level. PBS especially, given that it is funded by all taxpayers, should be unbiased and report all sides, rather than focusing on emotion laden unilateral reporting.