tagged w/ Mortgage Crisis
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ITS TIME TO FORECLOSE ON FANNIE MAE AND FREDDIE MAC
Its time to foreclose on the foreclosurers!!!
Occupy Fany.Fredy is calling for direct action to end the unnecessary foreclosures. We the people are calling for a joint effort to occupy Fannie Mae and Freddie Mac to force Congress to foreclose on F&F to facilitate, and economic recovery in our country, if they do not agree to a monthly mortgage principle reduction policy and the use of new mortgage terms.
For more information go to:http://goo.gl/tMfAWor www.foreclosurecrisissolved.wordpress.com/
LEARN HOW FREDDIE MAC HAS BEEN BETTING AGAINST YOU MAKING YOUR MORTGAGE PAYMENT.
http://www.npr.org/2012/01/30/145995636/freddie-mac-betting-against-struggling-homeowners?sc=fb&cc=fp/
There is article, after article written about how Fannie Mae and Freddie Mac, the giant mortgage securitization corporations, are unwilling to reduce principle balances on underwater mortgages they hold, even tho other financial businesses
have been able to reduce foreclosures by using principal reduction to keep families in their homes.
Still have doubts, read the article, posted on my web site "Fannie and Freddie Stand In The Way Of Debt Reduction" is the headline of an article that recently appeared in the New York Times.
Here is a few paragraphs from that article.
LIMITED IMPACT
(Any settlement would not apply to mortgages owned by Fannie Mae or Freddie Mac, which together own or guarantee most of the U.S. mortgage market. The regulator that controls the two government-sponsored enterprises has resisted cutting their loans, arguing it would cost U.S. taxpayers more money than other options would.
But lawmakers and top administration officials have pushed for a broader principal reduction program, and this settlement could lay the groundwork for that if Fannie Mae and Freddie Mac are swayed to test it out themselves as an alternative to the costly process of foreclosing on struggling borrowers.
Earlier on Wednesday, House Democrats sought to force the housing regulator, the Federal Housing Finance Agency, to explain its calculations in deciding not to offer principal reductions.
In addition, the Federal Reserve said in a rare 26-page white paper delivered to Congress this month that lawmakers need to do more to stabilize the housing market. But it stopped short of endorsing any plans to have Fannie and Freddie slash borrowers' loan balances)
Still have doubts, read the article "Fannie and Freddie Stand In The Way Of Debt Reduction" is the headline of an article that recently appeared in the New York Times.
Banks are trying to limit their responsibility for the damage the have done to people lives and our economy, as pointed out in his paragraph from an article Published on Monday, January 23, 2012 by Common Dreams says it all!
Obama's Choice on Housing: A Sweetheart Deal for the 1% or a Fair Deal for the 99%
by Van Jones and George Goehl
Rumor has it that as early as today, after months of negotiation with big banks, the White House may announce a settlement that would let the banks off the hook for their role in the foreclosure crisis -- paying a tiny fraction of what's needed in exchange for blanket immunity from future lawsuits.(Daniel Goodman / Business Insider
Now is the time to demonstrate, petition, convince, and occupy F&F to change their policy of no principal reduction. This is where the occupy groups should focus all their efforts to end the foreclosure and unemployment crisis.
Millions of American families are being kicked to the curb by the banks, and the financial sector. It is our contention that most foreclosures, and home abandonment's are unnecessary, or preventable.
Fannie Mae and Freddie Mac hold the key to improving the primary home market, and the economy, as explained in The "People's Economic Recovery Plan". www.foreclosurecrisissolved.wordpress.com
We should occupy, march, and hold demonstrations at Fany & Fredy headquarters.
We are not alone in this effort. The Federal Reserve, and members of Congress are putting pressure on the GSEs to reduce principal balances, and lower the interest rate on mortgages. Our efforts to bring attention to this inaction by F&F will reinforce our Representatives in Congress that are working to solve the foreclosure and unemployment crisis.
Occupy Fany.Freddie invites all the Occupy, and other concerned groups to join your fellow citizens to convince F&F, for their own benefit, and for your benefit, to change their mortgage terms and adopt a policy of principal reduction.
If we want to help millions of people stay in their homes, and find employment, F&F must purchase the "Ascending Interest Rate Mortgage" (AIRM), from banks and mortgage originators, and adopt the monthly principal reduction plan for underwater mortgages. If F&F will purchase the new mortgage, the banks and mortgage originators will offer the new mortgage terms to homeowners and home buyers. There-by eliminating the foreclosure inventory, and improving the primary home market and the economy.
F&F owe taxpayers over 150 billion dollars. If F&F do not agree to purchase the "AIRM" from the mortgage originators, the tax payers of the United States of America should kick their executives, and Mr.DeMarko, the head of Federal Housing Finance Agency, to the curb, and foreclose on them by petitioning President Obama, and the US Congress.
We the people should then adopt the "Plan" ourselves to facilitate an sustainable economic recovery, to put people back to work in the private sector, and prevent more foreclosures.
The "Plan"outlines three changes that need to occur to empower the people to create their own economic recovery. Changes to the bankruptcy laws, a change to mortgage terms, and a change to the income tax, as outlined in the "Plan".
View and sign our Petitions to "Stop Unnecessary Foreclosures" at: http://www.change.org/petitions/stop-the-unnecessaryforeclosures-and-uneployment-crisis-with-new-mortage-terms/
To view a video about bankruptcy go to: http://www.youtube.com/watch?v=J7YPR_p7DYQ%2F
If you want to increase job opportunity, and reduce foreclosures without increasing the deficit, please become a friend of Occupy Fany.Fredy and "Like" us at: http://www.facebook.com/pages/Occupy-FanyFredy/177079029043062?sk=wall
Not ready to get involved yet? What if it was your home, or your family's home that was being foreclosed? The way the economy is going, you could lose your job tomorrow, and your home could be in foreclosure in a few months. Help others now, to improve the economy, so it doesn't happen to you.
This is important!!Please forward this information to your friends, contacts, the news media, other occupy groups, and concerned organizations. Thank You!ITS TIME TO FORECLOSE ON FANNIE MAE AND FREDDIE MAC
Its time to foreclose on the... more
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In the 1960's the only way tenants could fight back against evil slum lords was to go on rent strikes -- they refused to pay until the slum lords fixed the apartments. I think the next logical step in the Occupy Wall St Movement is to advocate for national Mortage and Student Loan Strikes!
The banks need to be punished and forced to change. If million sof American refused to pay their outrageous student loans and their mortgages -- it would critically "starve the beast" to paraphrase our Tea Party friends. We need to stop meekly feeding the machine of Big Loans. If the banks refuse to modify home loans? Mortgage Strike nationwide!
And what recourse would the banks have if tens of million sof Americans simply stopped paying? It would cripple them and the sheer volume of the defaults would make it impossible for the banks to pursue legal action.In the 1960's the only way tenants could fight back against evil slum lords was... more
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For Part 1: http://storify.com/dentalwellness/too-big-to-fail-and-too-big-to-care
The interesting thing is that some of these lenders/banks can be so off the wall that they do not think that to whom much is given, much is expected. I remember one of them saying that it was within its right to make derogatory report on one of its customers’ credit file. Remember when it was the banks that needed assistance from the government of the United States, the government was within its right not to help but it did. It gave them the fattest checks to help them overcome their financial difficulties without any condition in the beginning and also went further to protect them in two crucial ways: allowed them to honor their outstanding contracts with others (unless teachers and public workers in Wisconsin that republican governor changed to the detriment of fair play and the workers); and our government insisted that the healthy banks should take the money as well so as to avoid stigmatization of such banks as CitiGroup, JP Morgan, Goldman Sach. The government did not make any bad entries on these bankers’ credit record instead tried to work with them to make them better. You will think that CitiGroup would do the same to its customers, I’d say you are wrong, it’s subsidiary, Citimortgage would not help, it would be too eager to report derogatory entries, it would not write letter to you to explain the problem instead would send you letters so incomprehensible that an English professor would not be able to make a sense of it and when you write for clarification, it would ignore that until you get the big guns like BBB, the U.S. Office of Comptroller of Currency that they suddenly recognize you as a human being like people who work for the company. In the area where government could make a big difference — help for troubled homeowners — almost nothing has been done. Thanks to politicians, Wall Street and their friends at CNBC. The Obama administration’s program of mortgage relief has gone nowhere: of $46 billion allotted to help families stay in their homes, less than $2 billion has actually been spent.For Part 1: http://storify.com/dentalwellness/too-big-to-fail-and-too-big-to-care... more
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No longer To Big to Fail now TO BIG TO JAIL
http://bit.ly/q2E0mU
http://huff.to/ookZix
http://www.secactions.com/
http://nyti.ms/qHeXeh
Someone needs to save the homeowners in this country & not let Wall Street walk away again - Goldman Sachs flat out lied in Levin Report and there is a plethora of more proof of predatory lending practices of these Banks but now get thrown another bone! Our Senate and Congressional leaders say they have Morals? Proof it!!!!No longer To Big to Fail now TO BIG TO JAIL
http://bit.ly/q2E0mU... more
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Los Angeles sues Deutsche Bank for slumlord practices and contributing to the foreclosure problem. Kevin Drum of Mother Jones cites that Obama's Hamp; ( mortgage modification program ), has not only been a miserable failure, but has facilitated the further exploitation and financial rape of the already cash strapped and unemployed homeowners facing foreclosure. Los Angeles is taking another step to curb this financial industry abuse of the public, because the Obama administration behaves indifferently to the failure of the Hamp program and leaves them no option. Read about it here:
http://motherjones.com/kevin-drum/2011/05/deutsche-bank-foreclosureLos Angeles sues Deutsche Bank for slumlord practices and contributing to the... more
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Ad firm Adzookie is claiming that if people are willing to turn the outside of their house into an advertisement–effectively turning their house into a billboard–Adzookie will make their monthly mortgage payments for them. Though the above picture was created with Photoshop, and Adzookie has yet to paint anyone’s house, Adzookie CEO Romeo Mendoza claims that since the offer launched Tuesday, the firm has already received more than 1,000 applications. The qualification criteria from Adzookie’s website:
We’re looking for houses to paint. In fact, paint is an understatement. We’re looking for homes to turn into billboards. In exchange, we’ll pay your mortgage every month for as long as your house remains painted
Here are a few things we’re looking for. You must own your home. It cannot be rented or leased. We’ll paint the entire outside of the house, minus the roof, the windows and any awnings. Painting will take approximately 3 – 5 days. Your house must remain painted for at least three months and may be extended up to a year. If, for any reason, you decide to cancel after three months or if we cancel the agreement with you, we’ll repaint your house back to the original colors.
If you’re prepared for the bright colors and stares from neighbors just complete the submission form below. We review every submission. If your home meets our criteria, an Adzookie team member will contact you.
What the information fails to mention is exactly how high the mortgage can be in order to qualify for the offer.
http://www.geekosystem.com/adzookie-house-ad/Ad firm Adzookie is claiming that if people are willing to turn the outside of their... more
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"..the financial crisis of 2008, whose aftereffects are still blighting the lives of millions of Americans, didn’t just happen — it was made possible by bad behavior on the part of bankers, regulators and, yes, economists.
What the film ("Inside Job") didn’t point out, however, is that the crisis has spawned a whole new set of abuses, many of them illegal as well as immoral.
And leading political figures are, at long last, showing some outrage. Unfortunately, this outrage is directed, not at banking abuses, but at those trying to hold banks accountable for these abuses.
The money banks would be required to allot to mortgage modification would be “extorted,” declares The Wall Street Journal. And the bankers themselves warn that any action against them would place economic recovery at risk.
All of which goes to confirm that the rich are different from you and me: when they break the law, it’s the prosecutors who find themselves on trial.
To get an idea of what we’re talking about here, look at the complaint filed by Nevada’s attorney general against Bank of America. The complaint charges the bank with luring families into its loan-modification program — supposedly to help them keep their homes — under false pretenses; with giving false information about the program’s requirements (for example, telling them that they had to default on their mortgages before receiving a modification); with stringing families along with promises of action, then “sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions”; and, in general, with exploiting the program to enrich itself at those families’ expense.
http://www.nytimes.com/2011/03/14/opinion/14krugman.html?_r=1&src=me&ref=homepage"..the financial crisis of 2008, whose aftereffects are still blighting the lives... more
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Ack! Just when you didn't think the mortgage crisis could get any worse, you learn that there is a database in Reston, Virginia that might have eaten your mortgage. In fact, the database itself claims to OWN more than 50% of US mortgages (about 60 million loans).
Created 16 years ago by Fannie Mae, Freddie Mac, Bank of America and JP Morgan Chase, the Mortgage Electronic Registration System (MERS) is, thankfully, beginning to run up against a few judges in foreclosure proceedings who are finally Just Saying No.
But that may not stop MERS in its tracks. This is a very involved story about the securitization of mortgages, but well worth the read for a deeper understanding of just how bad this mortgage crisis really is and the potential for it to get a lot worse.
For example: in a deposition, an officer of the company revealed that this corporation has THOUSANDS of Vice Presidents.
The NY Times article also states that "Federal bankruptcy courts and state courts have found that MERS and its member banks often confused and misrepresented who owned mortgage notes. In thousands of cases, they apparently lost or mistakenly destroyed loan documents."
Feeling better?
Read the whole story at the NY Times: http://www.nytimes.com/2011/03/06/business/06mers.html?_r=1&src=me&ref=business.Ack! Just when you didn't think the mortgage crisis could get any worse, you... more
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The federal bank regulator overseeing the nation's largest lenders is pushing for a quick and modest settlement to the months-long federal and state probes into abusive mortgage practices, frustrating other federal agencies and state regulators and raising questions over President Barack Obama's delay in naming a pro-consumer chief to head the agency.
The Office of the Comptroller of the Currency, which oversees lenders like JPMorgan Chase and Bank of America, plays a key role in the ongoing investigations launched last September into improper foreclosure practices. The federal review involves the OCC and other bank regulators, as well as the Departments of Justice, Housing and Urban Development and the newly formed Bureau of Consumer Financial Protection. The 50-state probe involves state attorneys general and state bank regulators.
But the OCC, known for its light-touch approach, is trying to come to a quick settlement with the banks it supervises, according to officials from multiple agencies involved in the investigations. The agency is negotiating an agreement that would cost the industry less than $5 billion in fines and mortgage modifications for troubled homeowners, including principal reductions, the officials said. Other agencies are pushing for something bigger.
THERE IS MORE GO READ!The federal bank regulator overseeing the nation's largest lenders is pushing for... more
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It’s no secret the role of government-controlled mortgage finance companies Fannie Mae and Freddie Mac has grown out of control.
Reuters says Fannie and Freddie now back 85 percent of new mortgages.
According to Bloomberg, between the two companies and the Federal Housing Administration the three groups own or insure almost 97 percent of all mortgage bonds.
The fate of the mortgage giants has been discussed for a while now, but today action has been proposed.
Treasury Secretary Timothy Geithner announced his recommendation for the future of Fannie Mae and Freddie Mac, and it involves a lot less involvement for the government-controlled mortgage finance companies.
The Obama administration supports this proposal to “wind down" the market share currently held by the government mortgage buyers, but says we should continue to count on Fannie and Freddie as a “backstop” in times of crisis.
The proposal offers three long-term options to reduce the government role and a few short-term steps to raise the cost of government-backed mortgages.
When they were created the two companies insured bond buyers against losses, with an implied promise that the U.S. government would make investors whole if the system failed.
Today, taxpayers have been supporting Fannie Mae and Freddie Mac to the tune of $150 billion since September 2008. All three of the options proposed today would end taxpayer support.
The Three Options
1. Extreme Change
Involves a “privatized” system of housing finance and little help from the government. In this options the government's only role is to help “narrowly targeted” low-income and veteran buyers.
2. Middle Ground
This option would replace Fannie and Freddie with a system aimed at helping low-income and veteran buyers (FHA's traditional target) in normal times and also provide a backup in a crisis. According to the Treasury Department this option is possible through the use of high-priced guarantee fees and restricted amounts of public insurance.
3. Big Government Role
The third option most closely mirrors the current system for the GSEs. Option three would impose even more regulation on Fannie Mae and Freddie Mac and carve out the government's role as “catastrophic reinsurance behind significant private capital.”
Short-Term Steps
* Increase the monthly insurance premiums, or guarantee fees, now charged by Fannie Mae and Freddie Mac. Higher premiums would in theory give other companies incentive to compete for lending.
* Increase Federal Housing Administration premiums by .25 percent/lower the ceiling for loans that Fannie Mae and Freddie Mac can insure. Jumbo loans are currently capped at $729,750 but are scheduled to fall to $625,500 on Oct. 1 if Congress doesn’t act.
* The administration also endorsed an existing law that forces the GSEs to shed loans in their $1.5 trillion portfolios by 10 percent a year as a way to reduce government exposure to failing mortgages.
* Phasing in higher pricing for Fannie, Freddie to a level even with private sector. This move would take place over several years.
Read the full article here: http://www.thinkglink.com/blog/2011/02/11/obama-administration-calls-for-housing-overhaul-winding-down-of-fannie-mae-and-freddie-mac
or read the Industry Reaction to Obama Admin Proposal to Phase Out Fannie Mae and Freddie Mac here: http://www.thinkglink.com/blog/2011/02/11/industry-reaction-to-obama-admin-proposal-to-phase-out-fannie-mae-and-freddie-macIt’s no secret the role of government-controlled mortgage finance companies... more
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A higher stock market is of little comfort to the millions who don't have jobs, are facing foreclosure, fraudulent or otherwise, or have no health coverage.
January 3, 2011 |
There are two potential ways to measure the economic performance of a political leader. One is by the profitability, stock prices and executive bonuses of a nation’s corporations. The other is by the financial condition of the majority of its population. Since he came to power, President Obama and his economic team have propped up the former and failed miserably to aid the latter. (For the record, ever since the first paragraph of Obama’s pre-primary website economics plan put free markets before people, this is where we were going, but it still hurts to get there.)
The S&P 500 index is up 50% since Obama took office. But unemployment remains higher than it was when he entered the White House, home foreclosures continue to mount to the detriment of borrowers and entire neighborhoods, health insurance companies responded to his health care “reform” bill by raising premiums, and the financial system’s largest banks continue to prosper in the wake of a multi-trillion dollar bailout with no strings attached to share their subsidizations with the rest of American citizens. To top it all off, as he approaches the midpoint of his first, and likely last, term, Obama bowed to the pressure of the Republican Party and extended tax cuts for the richest Americans in order to be able to also extend them for everyone else more sorely in need. There’s only so long you can blame another administration for your actions.
Obama’s economic policies have either been continuations of his predecessor’s, as in the case of taxes and bank bailouts, or bills so watered down to appease corporations, notably banks and insurance companies, that they are ineffective. In the process, he continues to alienate his supporters—individual voters, not the companies that funded his candidacy—leaving their economy in shambles. Here’s the recap.
Taxes
Just in time for Christmas, we got Obama’s big tax-cut compromise. Obama’s reverse Robin Hood deal with the Republicans disproportionally takes from the poor to give to the rich. The plan adds another $1 trillion to the record United States deficit, $700 billion of which would be the cost of extending tax breaks to the wealthiest 2 percent of the country, the rest going toward jobless benefits—necessary to help those victims of the wider economic problems, but not complemented with a job-creation program.
According to the Center on Budget and Policy Priorities, American millionaires would get 22 percent (or $200 billion over two years) of the benefits of the deal, while the bottom 20 percent of American workers would get less than one-half of one percent. According to David Cay Johnston, the 45 million households that make less than $20,000 a year will be slapped with a tax increase of $150 to $200.
Even though the majority of his own Democratic Party supported extending cuts only to Americans making less than $250,000 a year (on TV anyway, apparently not at their seats once the compromise was inked, notables with balls like Sen. Bernie Sanders aside), Republican “all-or-nothing” pressure was met by Obama’s capitulation. He could have bargained harder—say by suggesting that tax cuts not be extended for people making more than a million dollars, rather than punting the tax cut issue into the 2012 presidential election period.
What Obama effectively did was adopt George W. Bush’s tax policy in total rather than come up with a better deal, even though the Bush tax cuts increased the net worth of the wealthiest Americans while the wages of the rest of Americans (the ones that had jobs) stagnated or decreased per hour worked. The Republicans obviously considered the deal a victory, to hell with any Republican voters in the bottom 98 percent of the country. Wall Street thought it was better than expected. Jamie Dimon was all but salivating. Even though the majority of Americans wanted to end tax breaks for the wealthiest, plus extend unemployment benefits, Obama couldn’t pull it off.
To go to the next page:
http://www.alternet.org/news/149394/obama's_economic_report_card:_a%2B_for_helping_the_wealthy_--_failing_the_rest_of_us/A higher stock market is of little comfort to the millions who don't have jobs,... more
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It's been over three years since credit markets started shaking with the early tremors of the subprime crisis, and two years since that spread into a marketwide collapse. Prosecutors, regulators, Congress and journalists have spent the year uncovering the financial shenanigans that brought the market to its knees. It's been marked by a few blockbuster settlements and more revealing investigations -- as well as by some noticeable inaction in the reckoning.
Despite revelations coming up and down the financial spectrum, there have been no major criminal charges and almost no civil charges against executives. And while the SEC and some government prosecutors have been active, federal bank regulators have so far been quiet.
This all comes as Congress passed the Dodd-Frank financial reform bill this summer, seeking to overhaul the oversight of everything from mortgage securities to how banks make bets with their own money. As regulators hammer out the rules of the reforms, the devil may lie in the hotly contested details.It's been over three years since credit markets started shaking with the early... more
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No one is paying attention to the perfect storm brewing that will push the housing market down further in 2011.No one is paying attention to the perfect storm brewing that will push the housing... more
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Not really "new" news, but the url didn't come up as this having been posted before. Besides it's a good reminder of who was really making sure the fat cats on Wall Street would ultimately get bailed out and leave the tab for the little people.
Find put who acted as shills for the corrupt lending giants Fannie Mae and Freddie Mac and tried to cover up the scam that caused an economic crisis in the United StatesNot really "new" news, but the url didn't come up as this having been... more
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Financial reporter John Carney -- brother of Examiner political columnist Tim Carney -- reports at MSNBC that bank credit standards are going to be challenged as racist:
Banks will be accused of employing discriminatory credit standards when making mortgages in a series of fair housing complaints that a national consumer coalition plans to file beginning next week.
The National Community Reinvestment Coalition plans to challenge the widespread practice of requiring borrowers asking for FHA-backed loans to have higher FICO scores than the minimum required by the FHA, according to a report from Ken Harney at New Times.
The FHA requires a minimum FICO score of 500. Borrowers with down-payments as low as 3.5 percent must have a score of at least 580. Borrowers with scores between 500 and 580 must put a minimum of 10 percent down.
Several banks require higher rates. At the start of 2009, many banks moved their minimum FICO score for an FHA backed loan up to 620.
Note the median FICO score is 723. But requiring a score of 620 to get a home loan with only 3.5 percent down is racist? Huh? Wasn't giving people with poor credit huge loans with nothing down the reason we got into this whole mess in the first place?
What are we supposed to do here? Oh look, they're accusing us of being racist again for deigning to look at a person's credit history. Just give them the house in Florida and tell congress to send another cash truck to Fannie Mae.
http://washingtonexaminer.com/blogs/beltway-confidential/2010/12/paying-your-bills-time-racistFinancial reporter John Carney -- brother of Examiner political columnist Tim Carney... more
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The mortgage is still owed, but there's going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you're stealing my money.
You're going to then have trusts that don't have any assets that have been issuing securities that say they're backed by a whole bunch of assets, and you're going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they're going to do, and you're going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.The mortgage is still owed, but there's going to be a problem figuring out who... more
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mik661
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by Zach Carter, Media Consortium blogger
President Barack Obama’s decision to appoint Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) couldn’t have come at a more critical time.
Over 44 million Americans were living in poverty last year. That’s the highest number on record. The Great Recession is taking a terrible toll on everyone outside the executive class, but policymakers have been reluctant to pursue an economic agenda that improves the lives of ordinary Americans.
The uniqueness of Warren’s new post raises plenty of questions, but it puts a fierce defender of the middle class in office at a time when the middle class most needs help.
So what exactly will Elizabeth Warren do?
As Annie Lowrey emphasizes for The Washington Independent, it’s not entirely clear what Warren’s new job will be or how long she will have it.
Consumer advocates have pushed hard to get Obama to name Warren the first director of the new CFPB. Obama, citing Senate confirmation hurdles, has instead charged Warren with setting up the agency as an adviser to both the Treasury Department and Obama himself. The post allows Warren to get to work setting up the agency, but not the power to start drafting regulations. It’s good to see her get a post on the Obama team, but we do not yet know how influential she will be.
Tim Fernholz sums up the pros and cons of Warren’s appointment in a piece for The American Prospect. There are very real drawbacks to the move. Confirming Warren for a permanent post as director of the CFPB will be harder next year—Democrats are likely to lose Senate seats in November.
It’s not impossible, but if confirmation was Obama’s chief worry, he’s only made it harder on himself by kicking the nomination down the road. This is true for whoever Obama picks—the bank lobby is going to scream about anybody other than a bank lobbyist, and Republicans are filibustering almost everybody Obama nominates to any post, including critical economic policy positions at the Federal Reserve.
Getting to work
But the new role also gets Warren on the economic policy team right away, and allows the agency to begin staffing up under her stewardship, even if it can’t draft regulations until a permanent director has been confirmed. There will finally be a strong voice on Obama’s economic team prioritizing household financial security above all else. That’s very good news.
Whatever the formal powers of Warren’s new post, we can be sure she’ll have a significant impact on policy making. Her current role as chair of the oversight panel for the Wall Street bailout was given almost no power at all by Congress, yet Warren has transformed it into the only real source of economic accountability in Washington, D.C. That’s no easy task, and we can expect similar courage and creativity from her as a member of Obama’s economic team.
What will the CFPB look like?
Warren herself seems to be pleased with the appointment. In a piece for AlterNet, Warren says that she “enthusiastically agreed” to take on the new position, and explains the vision for the CFPB:
“The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them — way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market.”
Sea change
That sounds common-sense, but it’s exactly opposite to the past three decades of deregulation. Reversing the damage caused by that anti-regulatory fervor has been extremely difficult. The Obama administration needs Warren’s voice now more than ever. In the early days of his presidency, Obama pushed through a stimulus plan that has prevented the middle class from falling completely off the map. But those efforts are expiring, and they haven’t been enough to prevent millions of families from sinking into poverty.
Alarming poverty rate
In a harrowing piece for The Nation, Kai Wright notes that more people are now impoverished than at any time since the government began tracking poverty data. The poverty rate rose to 14.3 percent, with 44 million Americans—roughly one in seven—living in poverty. More than one-third of black and Latino children are growing up impoverished.
So it’s no surprise that income inequality is also at its most severe in decades. As Kevin Drum notes for Mother Jones—for the past thirty years, more and more American wealth has been concentrated among the richest citizens. The richest 1 percent of U.S. earners are raking in 10 percent more of the national income today than they were at the start of the Reagan administration, while the poorest 95 percent have seen their share of the national income decline.
Numbers like these aren’t a fluke—they’re a direct result of policies that put the interests of Wall Street and other powerful corporate players ahead of the well-being of households. Nor were these policies adopted in a vacuum– Wall Street lobbied hard for the right to pillage our pocketbooks, and when it couldn’t rewrite the rules, it simply broke them while bank-friendly regulators looked the other way. Elizabeth Warren can’t fix all of this on her own, and she’ll surely face opposition from some members of Obama’s inner circle. But families couldn’t ask for a better advocate, and her appointment couldn’t come at a better time.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
President Barack Obama’s decision to... more
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Opening a credit card from a store does more than get you a discount, it also hurts your credit score.
Equifax Blogger Ilyce Glink warns that opening credit cards hurt your score which is not worth it if you are looking to buy a home.
"The credit card I opened had only a $2,000 line of credit. I charged several hundred dollars worth of clothes and paid it off before the end of the month.
I saved 20 percent on the clothes. I cost myself thirty points in my credit score."
This experience also explains why mortgage lenders will pull your credit history at least twice between the time you apply for and close on your loan.
In today's new world of mortgage finance, lenders are tightening credit requirements. It's far more difficult to get a mortgage today than it was five years ago.
Even borrowers who have near-perfect credit histories with credit scores in the 800 range are being rejected for reasons that seemingly make no sense-like a small investment loss taken on a tax return, or an extra $500 deposited into a savings account that couldn't be adequately explained.Opening a credit card from a store does more than get you a discount, it also hurts... more
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Mortgage servicers regularly make errors and break the rules of the government's mortgage modification program, according to hundreds of homeowners who responded to a ProPublica questionnaire.
For example, all homeowners who are rejected are supposed to receive a formal denial from their mortgage servicer, according to the program's rules. But 136 homeowners reported that they had been rejected from the program without receiving a formal denial. Additionally, homeowners reported more than 1,000 instances of mortgage servicer errors, including losing documents and giving false information.Mortgage servicers regularly make errors and break the rules of the government's... more
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Borrowers are getting screwed again as bailed-out banks send their foreclosure dirty work to con artists with a history of breaking the law.
LATE ONE NIGHT IN February 2009, Ariane Ice sat poring over records on the website of Florida's Palm Beach County. She'd been at it for weeks, forsaking sleep to sift through thousands of legal documents. She and her husband, Tom, an attorney, ran a boutique foreclosure defense firm called Ice Legal. (Slogan: "Your home is your castle. Defend it.") Now they were up against one of Florida's biggest foreclosure law firms: Founded by multimillionaire attorney David J. Stern, it controlled one-fifth of the state's booming market in foreclosure-related services. Ice had a strong hunch that Stern's operation was up to something, and that night she found her smoking gun.
It involved something called an "assignment of mortgage," the document that certifies who owns the property and is thus entitled to foreclose on it. Especially these days, the assignment is key evidence in a foreclosure case: With so many loans having been bought, sold, securitized, and traded, establishing who owns the mortgage is hardly a trivial matter. It frequently requires months of sleuthing in order to untangle the web of banks, brokers, and investors, among others. By law, a firm must execute (complete, sign, and notarize) an assignment before attempting to seize somebody's home.
A Florida notary's stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn't even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern's people were foreclosing first and doing their legal paperwork later. In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. "There's no question that it's pervasive," says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. "We've found tons of them."
This all might seem like a legal technicality, but it's not. The faster a foreclosure moves, the more difficult it is for a homeowner to fight it—even if the case was filed in error. In March, upon discovering that Stern's firm had fudged an assignment of mortgage in another case, a judge in central Florida's Pasco County dismissed the case with prejudice—an unusually harsh ruling that means it can never again be refiled. "The execution date and notarial date," she wrote in a blunt ruling, "were fraudulently backdated, in a purposeful, intentional effort to mislead the defendant and this court."'s_newest_housing_nightmare/
Borrowers are getting screwed again as bailed-out... more
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