Vaboomer -- Baby Boomer Views & News

Foxes Guarding the Henhouse Again? Senator Dodd's Financial Reform Bill

by Nancy Mehegan

Fox:  Cunny, wily, clever, deceptive

It's never going to be OBVIOUS or OVERT when the Congressional foxes outwit us.  No one will announce suddently on CNN -- "Hey we're thieves, taking all of your money!"  Senator Chris Dodd is a perfect example.

Sen. Chris Dodd's bill will weaken a critical new agency

"Just imagine that years before the subprime crisis hit, Congress had directed a federal agency to prohibit unfair or deceptive mortgage loans...  

We had such an agency. It's called the Federal Reserve.

But the Fed didn't use its powers to bar bad mortgage loans until 2008, far too late to prevent the Great Recession.

... Now fast forward to today. Congress is considering changing the rules governing consumer protection. The House of Representatives has passed a bill creating an independent Consumer Financial Protection Agency, which would take over the Fed's consumer protection role. But the bill recently proposed by Sen. Chris Dodd, chairman of the Senate banking committee, would place the consumer financial protection function in - you guessed it - the Fed. ....

The Congress is Slick

The Dodd bill provides that the new consumer protection bureau could be overruled by a two-thirds vote of a new Financial Stability Oversight Council. Two-thirds sounds like a pretty big margin, doesn't it? Well, not so fast. The members of that council include people like the controller of the currency - whose office sued to prevent states from enforcing consumer protection laws - and the Federal Reserve chairman. Of the nine members of the council, six can be expected to side with financial institutions on consumer protection issues. These are the people, in other words, who did not prevent the current crisis from happening - and may even have enabled it.

If there's going to be a veto power, it should rest in Congress, not in the hands of such bank regulators. " (NY Daily News)

Read complete NY Daily News article:

Tents for Haiti: The Rainy Season is Coming

I am a member of a social networking site called Haiti without Borders and the following post tells of the dire need for temporary shelter for earthquake victims given the coming rainy season in Haiti. The telephone number at the end of the post is one you can call for a donation of a tent(s) or money for tents. We all have so much...be generous.

"Earlier on Thursday, that is two days following the devastating earthquake, Mr. Houver said in a press release: "What we need is tents, tents and more tents. We need large or individual tents, whatever is available, and financial support quickly."

Ms. Pineiro explains this isn't a call to fish out a musty old tent from your attic -- the logistics of coordinating individual deliveries of tents from individuals would be daunting. But she says her group will need a major cash infusion to buy tents in the coming days. She says the IOM has about 10,000 tents in Haiti left over from a previous hurricane relief operation and is trying to get them out into the field. But she says the current IOM plan is to provide shelter to 1 millions Haitians, an effort the group estimates will require about 200,000 tents.

Everyone wishing to donate a tent to help shelter a family is encouraged to do so. If you don't have one, share this information with your friends. With the rainy season fast approaching it is an urgency to shelter upwards to 1 million that are without a home in Haiti. If you have a tent you wish to donate, please call us at: 407-844-9765."

Seniors -- Beware Reverse Mortgage Bloodsuckers!

Reverse mortgages are not necessarily a bad idea for homeowners 62 or older who want to cash out decades' worth of equity.

Predatory Lenders Return

But some of the people responsible for subprime and predatory lending apparently have turned to the reverse-mortgage business in force, using high-pressure tactics to trap more seniors into giving away everything and getting little in return.  Here is a report from a very reputible organization that is of real importance to Boomers. This is a buyer beware report. Take heed.

National Consumer Law Center

Report Released at News Event with U.S. Sen. Claire McCaskill BOSTON – Oct. 6, 2009

Abuses and abusers from the subprime mortgage market have begun showing up in the reverse mortgage market, putting at risk the equity and savings of millions of seniors. That’s the main finding of  a report issued today by the National Consumer Law Center. “In the reverse mortgage market, seniors face some of the same aggressive lending practices that were common in the subprime lending boom".

Subprime Revisited

"There are 2,700 [reverse-mortgage lenders] in the market today, and 1,500 of them made their first loans in 2008," said Sen. Claire McCaskill (D., Mo.), who has been working on a bill to curb some of the worst abuses - including widening yield-spread premiums that benefit lenders and brokers at the expense of elderly borrowers.

“Brokers are targeting seniors’ home equity and using reverse mortgages as their tools” ... with top banks like Wells Fargo and Bank of America and large insurance companies like Genworth and MetLife leading the way.

 “Many of the same players that fueled the subprime mortgage boom — ultimately with disastrous consequences—have turned their attention to the reverse market. Lenders, including some of the nation’s largest banks, view that market as a source of profits that have dried up elsewhere. 

“We’ve seen this movie before and it didn’t have a pretty ending."

“We urgently need stronger protections for reverse mortgage borrowers." said Sen. McCaskill.

... “Reverse mortgages are complicated and expensive financial products that must be used wisely and regulated carefully.  The report also highlights the danger of predators who use reverse mortgages as tools in schemes to steal the home equity of unsuspecting seniors, or to fund the purchase of expensive insurance and financial products that pay high commissions.

Educate yourself:

Consumer guides:   http://www.consumerlaw.org

CONTACTS: Pat Mitchell, (703) 276-3266 or pmitchell@hastingsgroup.com; for NCLC, Rick Jurgens, (617) 226-0334 or rjurgens@nclc.org; and, for Sen. McCaskill, Maria Speiser at (202) 228-6263.