Most people have emotional ties to their homes because of family memories created there, but the responsibilities that come with home mortgages can become financially burdensome to seniors. There are many factors you should consider when thinking about applying for a mortgage to buy, refinance or make improvements to your home.

Q:       What should I keep in mind when considering a mortgage loan?

A:        If you already own a home, consider whether it makes sense to stay in your current home or to downsize. As children move out, a large home may no longer be practical. Downsizing can both cash out equity from a larger home and reduce monthly expenses by replacing a larger mortgage payment on a larger home with a smaller mortgage payment on a smaller home. Moving to an apartment or condominium without a yard or where much of the maintenance is handled by a homeowner’s association is also an option.

            If your home is already the right size and you can afford to stay, you may want to consider refinancing your existing mortgage loan. With proper financial planning, younger seniors can plan to repay their mortgages before they retire. However, many seniors are not able to retire without mortgage debt, and refinancing allows you to lower the interest rate or reset the term of your existing mortgage. By resetting the mortgage term, the outstanding balance of your existing loan will be spread out over a longer period of time. Extending the term may increase the overall interest charges you will pay, but it also will lower your monthly payments and free up money for other monthly expenses. If you are on a fixed income, consider refinancing from an unpredictable adjustable rate mortgage to a stable fixed rate mortgage.

 

Q:       Will I qualify for a mortgage loan?

A:        Your eligibility for a mortgage loan generally will depend on your income, your assets (checking, savings, stocks, bonds, IRAs, etc.), your credit score and the value of the property that will be securing the mortgage loan.

            Not everyone who applies for a loan will be approved or will get the same loan terms, but lenders must consider reliable income from part-time employment, Social Security, pensions and annuities when making mortgage loan decisions. They must also consider reliable public assistance income in the same way that they consider other income. The Equal Credit Opportunity Act (ECOA) prohibits lenders from credit discrimination on the basis of a number of factors, including your age and whether you get public assistance. A lender may ask you for most of this information in certain situations, but may not use it as the basis of a decision to reject your mortgage application or to set your loan terms. If your mortgage application is denied, the lender must give you specific reasons for the denial.

Q:       Even if I qualify, how will I know if a mortgage loan is right for me?

A:        There are many types of mortgage loans, including conventional home loans, FHA insured loans, VA guaranteed loans for veterans, Rural Housing Service (RHS) guaranteed loans, home equity lines of credit and reverse mortgages. Some loans have strict qualification requirements while others are designed for lower income homebuyers.

            Obtaining a mortgage loan carries costs that can vary with the type of loan you choose. Usually there will be lender fees, an appraisal fee, title insurance costs and other closing expenses related to the mortgage loan. You must also factor real estate taxes and homeowners insurance into your budget. Usually you will be required to make a down payment of between 3.5 percent and 20 percent, depending on the type of loan and the bank’s requirements. While lower down payments can be appealing in the short term, they come with higher monthly payments due to higher interest rates. Smaller down payments also may require additional mortgage insurance, increasing your total costs over the long term. However, making a higher down payment can deplete your savings and investments. It is critical to consult a trusted financial advisor and get independent financial advice before deciding which mortgage product may make sense for you, and what terms best suit your financial situation.

This “Law You Can Use” legal information column was provided by the Ohio State Bar Association. It was prepared by Adam Saurwein, an attorney in the Cleveland office of the firm of Benesch Friedlander Coplan & Aronoff. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek the advice of a licensed attorney.

Q:       My elderly mother receives a lot of phone calls from professional solicitors asking her to make donations to charities all across the country. Some are groups we have never heard of before. Her number is on the National Do Not Call Registry. How can I get these phone calls to stop?

A:        Many people are surprised to learn that the Do Not Call Registry does not apply to charitable fundraising. Registering your home telephone number with the National Do Not Call Registry will not prevent charities from contacting you. However, charities must keep a record of people who have asked not to be contacted again, so you can ask not to be contacted in the future. Charities also must honor Do Not Call requests sent in writing.

Q:       Does Ohio law regulate professional solicitors who are hired to raise money for charitable organizations?

A:        Ohio law requires such solicitors to identify themselves clearly as professional solicitors and state the name of their firm as well as the specific charity they’re representing at the beginning of each call.

Q:       If I ask to be placed on a Do Not Call list during a call from a solicitor hired by a charitable organization, will my request be honored?

A:        If, during the call, you ask to be placed on a Do Not Call list, your request must be honored whether the caller is a staff member, volunteer or solicitor for that charity. Given the number and the variety of lists being worked, removal of your name might take a few weeks. Solicitors must relay your request to the charity and then the charity is responsible for sharing the information with any other solicitors it might hire.

Q:       Can I ask to have my name removed from more than one charity at the same time?

A:        No; there is no way to remove your name from the lists of multiple charities simultaneously. In other words, there is no legal requirement for a professional solicitor to remove your name from the lists of all the charities he or she may represent.

Q:       Are professional solicitors regulated by Ohio law?

A:        Yes. Professional solicitors and charities asking for donations must meet a number of legal requirements and, of course, are prohibited from misrepresenting themselves or their intentions. For example, some solicitors may try to intimidate the elderly by using aggressive tactics, falsely claiming the consumer pledged or gave a gift previously, or using names that sound similar to those of other well-known organizations.

Q:       Are there things I should be aware of when dealing with donation requests?

A:        Always be wary of sharing bank, credit card or other personal information with an unknown or uninvited caller. Scammers are always looking for opportunities to steal financial data or even identities.

            Also, it’s also a good idea to ask questions or request written information before donating. If a solicitor calls claiming to represent a particular charity, find out how much of your donation the charity will actually receive. Contact the charity directly and confirm that a fund-raising campaign is underway. See if family members or friends are familiar with the charity’s work and whether it’s a solid, reputable organization. Review online evaluations of charities from watchdog groups at sites such as www.charitynavigator.org, www.charitywatch.org, and www.bbb.org/us/charity/. You can also see a charity’s 990 return filed annually with the Internal Revenue Service at www.guidestar.org.

Finally, it’s wise to prepare a giving plan that identifies the causes and charities you choose to support. By approaching charitable giving in a thoughtful, organized fashion, you’ll be prepared to make decisions in line with your priorities when you receive requests for donations.

Q:       What can I do if I have concerns about charitable organization solicitations?

A:        If you have concerns about charitable solicitations, please contact the Ohio Attorney General’s Office or file a complaint by calling 800-282-0512 or by visiting www.OhioAttorneyGeneral.gov.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Beth Short, who is part of the Ohio Attorney General’s Charitable Law Section. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       I was just asked to serve on the board of a local charity that I have been supporting for years because of its great services. What should I know?

A:        Serving on the board of a charitable organization enables the staffs, volunteers and charity donors across the state to enhance the quality of life in all our communities. The job is demanding, but also rewarding, and is a vital function.

Becoming a board member for a charitable organization means more than merely accepting an honorary title or helping a charity that contributes positively to the lives of people in the community. When you become board member, you will be taking on an important job with specific legal responsibilities.
           

Q:       What specific legal responsibilities would I have?

A:        As a board member, you would have four basic obligations to the charity you serve: duty of care, duty of loyalty, duty of compliance, and duty to maintain accounts and records. Observing these duties requires you to pay attention, ask questions and take your role seriously. Your top priority as a board member is to keep faith with donors and stakeholders, ensuring that the organization is able to honor and perform its mission now and in the future. 

            Board members are the first line of defense for ensuring the integrity of charitable organizations and the entire philanthropic sector. They are legally bound to make certain all designated resources are used effectively and efficiently for the implementation of an organization’s mission and not for anyone’s personal benefit. Only an active board that routinely develops and evaluates programs and policies having to do with day-to-day operations in the organization can successfully meet that obligation.

Q:       What questions should I ask before agreeing to serve on a board?

A:        You should ask how the board operates, whether job descriptions are available and what you will be expected to do. Examine past board meeting minutes, financial reports, by-laws and policies. Find out whether the charity carries liability insurance for its directors and board members. Ask to see the organization’s annual filings with the IRS and the Ohio Attorney General’s Office. The contents of these documents—or the lack of documentation—could signal potential problems or indicate how much work must be undertaken to properly establish and operate a governance structure for the organization.

Q:       Where can I get help to meet my legal responsibilities as a board member?

A:        The Ohio Attorney General’s Office regulates charitable organizations and assists board members with meeting their responsibilities. Board governance training and related materials are among the resources available at www.OhioAttorneyGeneral.gov to help new leaders of charities. Also, questions about training and resources for charitable board service and charitable fundraising can be emailed to CharitableLaw@OhioAttorneyGeneral.gov.

            Publicized incidents of theft, embezzlement and other fraudulent activities have damaged the reputations—sometimes permanently—of a number of charitable organizations. Many such incidents could have been avoided had board members put in place policies and processes that uncovered wrongdoing more quickly or prevented it altogether. Donors and stakeholders deserve the assurance that gifts and resources are properly protected and utilized.

Q:       Does the Ohio Attorney General’s Office investigate charitable organizations when wrongdoing is suspected?

A:        Yes. The Ohio Attorney General’s Charitable Law Section regularly receives complaints about lax controls and misuse of funds at charities. It launches investigations when problems are suspected or discovered, and the office has broad authority to take action to protect or recover charitable assets. Board members who scheme to defraud donors or charities may face civil as well as criminal actions to recover lost resources. Complaints can be filed online at www.OhioAttorneyGeneral.gov, mailed to the Charitable Law Section at 150 E. Gay St., Columbus, OH  43215, or people can call 1-800-282-0515 to report any suspicious charities or solicitations.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by Beth Short, who is part of the Ohio Attorney General’s Charitable Law Section. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       Human trafficking is all over the news lately. What is it? 

A:        Human trafficking, also known as trafficking in persons (TIP), is a form of modern-day slavery in which profit is made from the control and exploitation of others. As defined under Ohio and federal law, victims of human trafficking include:

·       children involved in the sex trade;

·       adults age 18 or over who are coerced, manipulated or deceived into performing commercial sex acts;

·       anyone forced into different forms of “labor” or “services,” such as domestic workers or farm-workers forced to work against their will.

            Each of these situations has one or more of the following in common:

·       elements of force, including physical abuse or the threat of physical abuse;

·       fraud;

·       compulsion or coercive control that, much as in the case of victims of domestic abuse, often involves emotional and mental manipulation, although it does not always involve violence. The Ohio Trafficking in Persons statute requires only that a victim’s will be “overcome by force, fear, duress or intimidation.”

Q:       How does human trafficking affect me in Ohio? Doesn’t this mostly happen in foreign countries?

A:        Ohio ranks fifth in the nation for human trafficking. Unlike guns and drugs, human beings can be sold time and time again. Human trafficking is one of the fastest growing criminal industries in the world, including Ohio, and second only to drug trafficking.

            A recent study estimates that 1,078 of Ohio’s children are lost to sex trafficking every year. The Ohio study also revealed:

·       88 percent of Ohio’s human trafficking involves sex slavery;

·       84 percent of Ohio victims are American born.

Q:       How does human trafficking happen in Ohio?

A:        There are two major reasons Ohio ranks fifth in the nation for human trafficking:     

            1) Ohio’s large urban centers and rural counties include a large transient and immigrant population. Language barriers and transience make trafficking difficult for authorities to recognize.   

            2) Ohio’s five major highways are convenient for human traffickers who sell in other states and in Canada.

Q:       Is prostitution considered human trafficking? 

A:        Yes. Most prostitutes in Ohio are controlled by pimps, drug dealers, strip club operators, internet sex and escort providers, and drug house operators. Because prostitutes are largely controlled by force, fraud, fear, duress or other coercive control techniques, they are considered victims of human trafficking, regardless of their age. Researcher and author Catharine MacKinnon explains that, in prostitution, money “…acts as a form of force, not as a measure of consent.” According to abolitionist Kathleen Barry, oppression “cannot effectively be measured according to degree of consent, since even in slavery there was some consent, if consent is defined as inability to see, or feel any alternative.”

            For this reason, the Franklin County Municipal Court in Columbus, Ohio created a specialty docket court called CATCH (“Changing Attitudes to Change Habits”), to assist human trafficking victims who have been changed with commercial sex acts. CATCH Court’s Judge Paul Herbert has said that “the world’s oldest profession is the world’s oldest oppression.”

Q:       How might I recognize human trafficking in Ohio?

A:        "Red flags," such as the abbreviated list below, suggest that human trafficking is occurring.  A person may be a victim of human trafficking if he or she:

·       lacks freedom to come or go;

·       indicates an inability to move or leave a job;

·       is under 18 and is providing commercial sex acts;

·       is in the commercial sex industry and is controlled by a pimp, drug dealer or other “manager”;

·       is unpaid, paid very little, or paid only through tips to perform a service;

·       works excessively long and/or unusual hours.

Q:       What can I do if I think someone in Ohio is a victim of human trafficking?

A:        With as much detail as possible, contact the National Human Trafficking Resource Center Hotline 24 hours a day/7days a week at 1-888-3737-888.

This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Judge Gregory F. Singer of the Montgomery County Common Pleas Court with assistance from Tonya Folks, development director for BeFreeDayton.org, an abolitionist organization. The column offers general information about the law. Seek an attorney’s advice before applying this information to a legal problem.

Q:       I’m getting ready to file a Chapter 7 bankruptcy. Can I keep any of my property after bankruptcy?

A:    Yes. “Exempt property” refers to property the debtor in bankruptcy can keep. For example, you can keep cash of up to $450 (the “cash-on-hand exemption”) and household goods worth up to a total of $12,250  (the “household goods exemption”), as long as no one particular item is worth more than $575. The theory behind these exemptions is that, as a debtor filing bankruptcy, you need to keep some property to emerge from bankruptcy with your financial fresh start. Even though bankruptcy is federal law, these two exemptions are set forth in Ohio’s state statutes.

Q:       Do I get to keep my home after bankruptcy?

A:        If your mortgage is current and the house worth less than what you owe the mortgage lender, you can usually keep your home. Even if there is no mortgage, you may be able to keep your home if it is worth less than the amount of Ohio’s homestead exemption. This exemption is now $132,000, assuming your house is held in only one name. If your house is held jointly by you and a spouse, the exemption is $264,000. If your house is worth more than what you owe the lender, you may be able to keep your home so long as the equity does not exceed the applicable homestead exemption. The homestead exemption only applies if you or a dependent of yours is living in the home. This means that you can’t apply the homestead exemption to a property that you own, but rent out to others.

Q:       Are there any catches?

A:        Yes. The law was changed on March 27, 2013. Before then, the exemption was much lower – only $21,265 for a house held in one name. The new law says the higher exemption of $132,000 applies only to claims arising after March 27, 2013. It is unclear exactly what this means. Let’s say, for example, that one of your creditors has a judgment lien on your house that was filed before March 27, 2013. That creditor may claim that the old law (with its homestead exemption of $21,265) applies or that no homestead exemption applies. The trustee appointed in your bankruptcy case also may argue this, which likely will mean that the court must decide which law applies in your case. This is why it is very important for you to consult with a bankruptcy attorney to see how the new law will apply to your situation.

Q:       Do the changes to the Ohio exemption law affect any other property?

A:        Yes. Another change to the law makes it clearer that you can keep an IRA account when you file a bankruptcy. Some brokerage firms offering IRAs require their customers to pledge their IRAs as collateral to secure any amounts the customers might owe to the firm, but Internal Revenue Service regulations do not allow this. Some bankruptcy trustees were taking the position that any pledge of the IRA for collateral negates its exempt status, which would allow the bankruptcy trustee to liquidate the IRA for the benefit of creditors. The change in Ohio law is intended to make it harder for the bankruptcy trustee to assert that an IRA can be liquidated in bankruptcy in order to satisfy creditors.

Q:       What else should I know about bankruptcy exemptions?

A:        One of the many issues that arise when applying bankruptcy exemptions involves insurance policies with cash surrender value. If you own a policy that insures your life and the beneficiary is your spouse or children, then the policy’s cash value is exempt. This means that you can keep the policy if you file a bankruptcy. However, if the policy beneficiary is someone else who is not your dependent, or if the policy is on the life of your child, then the policy is not exempt. This means that the trustee can cash the policy in for its cash surrender value and distribute the proceeds to your creditors. In a bankruptcy situation, many other issues involving exemptions arise. Your bankruptcy attorney should be able help you sort out these issues.

This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by attorney Julie E. Rabin, a principal in the Cleveland firm of Rabin and Rabin LPA. Articles appearing in this column are intended to provide broad general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.