About Me 0016: Making Money

One industry that does not appear to have been hit all that hard by the economic downturn: Federal lawmaking.

Even as the nation’s unemployment rate was reaching its highest levels in about a quarter-century, members of Congress saw their wealth collectively rise roughly 16 percent from 2008 to 2009, according to a new study from the Center for Responsive Politics.

The center’s analysis of lawmakers’ financial disclosures found that median wealth for members of the House and Senate grew to roughly $911,000 in 2009, after sitting at about $785,000 the previous year. It also found a small increase in the number of Congressional millionaires, with that figure now sitting at 261 – or close to half of all members of Congress.

More than 20 percent of those millionaires — 55 — had an average estimated wealth of at least $10 million. And moving up to the highest end, eight lawmakers — five Democrats and three Republicans — had an average wealth that stretches into nine figures.

Members of Congress report their assets in broad ranges, from which C.R.P. calculates an average estimated wealth. In its release on Wednesday, the center noted that lawmakers are not required to report all of their assets, including the worth of their personal residences.

The report also lays out which corporations attract the most congressional investors (with General Electric coming in No. 1) and calls for the disclosure reports, which are now submitted on paper, to be turned in electronically. It comes as lawmakers are going back and forth over whether to extend the Bush-era tax cuts for higher-income individuals and families.

It's as if the Fed was functioning in a complete vacuum and has never heard of foreclosure fraud.

WASHINGTON — As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms....

Since 1968, the Truth in Lending Act has given homeowners the right to cancel, or rescind illegal loans for up to three years after the transaction was completed if the buyer wasn't provided with proper disclosures at the time of closing.

Attorneys at AARP have used the rescission clause for decades to protect older homeowners stuck in predatory loans with costly terms. The provision is also helping struggling homeowners to fight a wave of foreclosure cases in which faulty and sometimes-fraudulent disclosures were used....

Critics say the proposed change by the Fed would render the rescission clause useless. The Fed proposal would require homeowners who seek a loan rescission through the courts, to pay off the entire loan balance before the lender cancels the lien.

"This, of course, would be almost impossible for most consumers to do because they can't come up with the money until they get out of the loan. And they can't get out of the loan until the lien is released," said Barry Zigas, director of housing and credit policy at the Consumer Federation of America. "None of us are quite sure what purpose is being served by this proposal or what prompted it."

According to the New York Times which ran an editorial against the proposal earlier in the week, the Fed wants to eliminate this protection for homeowners because of their “concern over banks’ compliance costs." Since the Fed certainly can't be concerned about banks fraudulently taking people's homes from them.

What Zach Carter says:

It’s hard to imagine a way for the Fed to disgrace itself any further than it did by failing to rein in the mortgage mess over the past decade. But if it proceeds with this effort to protect banks that engaged in predatory lending, it will not only be guilty of falling down on the job and looking the other way, but of actively encouraging illegal mortgage lending.

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Wednesday 8 December 2010

Making Money

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