Senator Grassley – stand with consumers!

That was the message of petitions delivered to Senator Grassley on May 2nd by a delegation of Iowans. The petitions, which call on the Senate to confirm Richard Cordray to a full term as director of the Consumer Financial Protection Bureau (CFPB), bore the signatures of more than 160,000 people, including 1,229 citizens living in Iowa.

“Senators have a simple choice: they can bring this nomination to a vote, or they can do the bidding of the Wall Street lobbyists and shady lenders who have been trying to undermine the CFPB ever since they failed to prevent its creation,” said Iowa PIRG Advocate, Sonia Ashe.

After favorable action by the Banking Committee, Cordray’s re-nomination goes before the full Senate. Director Cordray has earned wide and bipartisan praise for his leadership of the CFPB up to now. Unfortunately for the citizens of Iowa however, Senator Grassley has joined a bloc of 43 Senators who are threatening to bottle up this nomination indefinitely, unless the CFPB is first dramatically weakened.

“The CFPB is the only regulator looking out for everyday people,” said Matthew Covington with Iowa CCI. “They are not some radical rogue agency, and Senators shouldn’t be playing politics on this issue. Americans deserve a fully functioning CFPB if for nothing else than to prevent another Great Recession caused by rampant Wall St. greed.”

The CFPB was created after the financial crisis of 2008 to end predatory lending and bring basic standards of fairness and transparency to the world of credit cards, mortgages, payday lending, student loans, auto loans, debt collection, credit scoring and other financial products and practices.

Here’s just some of what this new agency has already done:
• Returned nearly half a billion dollars to consumers cheated by credit card companies;
• Moved to end the era of mortgages designed to rake in up-front fees before they self-destruct;
• Stood up for students and families trapped in high-cost private education loans; and deceptive lending practices; and
• Protected military families against illegal foreclosures and deceptive lending practices

On April 9, a leadership team of CCI members held meetings with both Assistant Attorney General Patrick Madigan and Troy Price, the Executive Director of the Iowa Democratic Party.

We had two very clear messages for them to deliver to President Obama – he must get serious about replacing Ed DeMarco as the director of the Federal Housing Finance Agency(FHFA) and he needs to immediately reverse course on proposing cuts to Social Security.

The Iowa Attorney General’s Office has worked hard to address abuses in the mortgage servicing industry and pushed for servicers to reduce principal on homes that are “underwater” – more is owed than what the house is worth.  Principal reduction is a common sense measure that would help keep people in their homes, save taxpayer money, and jump start the sluggish economy.

Standing in the way of any meaningful principal reduction is a man by the name of Ed DeMarco who oversees loans held by Fannie Mae and Freddie Mac.  It is in everyone’s best interest for this man to be replaced by someone who will move quickly to reduce principal on underwater homeowners.  And while we all must keep up the grassroots pressure on the Obama administration, we wanted to know we had another messenger who knows the ins and outs of principal reduction and the servicing industry – Attorney General Miller and his staff.

Following a productive meeting with Patrick Madigan, the Assistant Attorney General, members dropped by the Iowa Democratic Party headquarters to deliver the same message about Ed DeMarco as well as our shock that President Obama would willingly put cuts to Social Security in his budget to be unveiled on April 10.

President Obama has proposed to switch to the “chained CPI” as a way to calculate cost of living adjustments for recipients of Social Security.  The ugly truth is that the chained CPI is a benefit cut, pure and simple, and affects current recipients as well as future retirees.  This is even more insulting given the fact that Social Security has not, and cannot, contribute to the federal deficit.

We’ll continue to elevate these important issues with the media, elected officials, party leaders and the general public until we get assurance that policy makers are doing right by the American people when it comes to housing and retirement security.  And as long as Ed DeMarco remains at FHFA and Obama pursues the chained CPI for Social Security, we will not remain silent.

 

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Cordray hears from community before public hearing

Members of Iowa CCI and other allies met on the morning of March 28 in Des Moines and sent him back to DC with a broad mandate to crack down on predatory payday lenders and mortgage servicers.

“It’s a telling irony – not lost on some of us – that we even need such a bureau, that we need protection from a financial mafia that should be in prison… but instead sits in places of power.” -CCI member Judy Lonning

The CFPB and Director Cordray were in Des Moines to meet with grassroots groups tackling predatory lending. CCI, in partnership with other allies, hosted a closed-door meeting to discuss predatory financial institutions and the CFPB’s role in holding them accountable. Following the closed-door meeting, CFPB held a public community forum to announce changes to their consumer complaint database to better serve consumers who were wronged and bring to light the predatory lending institutions that are the worst actors in the field of consumer lending.

In our closed door meeting, CCI member Cherie Mortice laid out the devastating effects payday loans – both storefront lenders and payday loans pushed by banks like Wells Fargo – have on families and neighborhoods like the one where she lives on the east side of Des Moines.  “I live in a working class neighborhood and it doesn’t take much to push these people over the edge,” said Mortice.  “Payday loans tear apart the economic stability of neighborhoods like mine, and if we don’t have serious regulations placed upon this industry, the people will see this as just another shell game to punt off responsibility.”

Mortice called on the CFPB to issue sweeping regulations of the payday loan industry, including extending the payback period for these loans due in full on the borrower’s next payday, as well as prohibiting the use of Social Security checks as collateral for obtaining a loan to protect the most vulnerable.  She also urged the CFPB to publicly stand with other financial regulators and move immediately to halt big banks like Wells Fargo from offering similar predatory loans to their customers.

If you want to join Cherie and thousands of others in calling on federal regulators to get big banks out of payday lending, take action here.

CCI member Jess Mazour laid out many of the abuses in the servicing industry she witnessed with her time at Wells Fargo during the height of the recession and foreclosure crisis.  “It seemed impossible for someone to work through the system for help.  I hated telling people sorry your husband got cancer, or sorry you lost your job – but you signed this contract and this is the process.  It seemed so immoral to me.”

CCI member Larry Ginter called on the CFPB to use everything in their power to clamp down on fraud and abuse in the servicing industry.  He specifically called on them to require all servicers to offer a struggling homeowner a modification in good faith, and most importantly to require them to correct any and all errors made in a modification – something servicers are currently only required to acknowledge, but not correct. “Servicers are experts at what they do,” Cordray explained. “It’s just that nobody is holding their feet to the fire.”

Judy Lonning, a CCI member from Des Moines, ended the closed-door meeting by directing the CFPB to fully embrace their work for we the people.  “You and your agency represent hope that things can change.  We need you to go over the heads of the financial elite to address in meaningful ways the grave injustices resulting from a climate where anything that maximizes profits has been regarded as fair game.”

 

 

CCI members Cherie Mortice and Larry Ginter are in Washington, DC today meeting with top officials from the Obama Administration to discuss the ongoing housing and foreclosure crisis.

The meeting, organized by National People’s Action and the New Bottom Line, brought together hundreds of community activists from across the country to push for widespread principal reduction as a way to stabilize the housing market and the economy.

Nationally, there are almost 16 million underwater homes, worth $2.8 trillion, that are $1.2 trillion underwater. Resetting those mortgages to fair market value would save the average underwater homeowner $543 per month, pumping $104 billion into the national economy every year. This would create 1.5 million jobs nationally.

Cherie and Larry had the opportunity to share their concerns with HUD Secretary Shaun Donovan and National Economic Council Director Gene Sperling.  The pair also met with representatives from Senators Harkin and Grassley.

For more information about the housing crisis, and to share your own story, visit www.homeiswherethevoteis.com.

The Des Moines register reported today on the first progress report of the foreclosure settlement that Iowa AG Tom Miller finalized earlier this year.

The report, released by the settlement monitor, Joseph Smith, raises several red flags. The revelation that almost $9 billion of the money committed for mortgage relief was directed toward short-sales causes the most concern.

Our impression was that this settlement was meant to keep people in their homes, which a short sale does not do. The majority of that money should have been marked for principal reduction, yet only about $750 million worth of principal has been reduced so far, and some banks have yet to reduce the principal on a single loan.

Since our first meeting with AG Miller in December 2010, CCI has been fiercely pushing for a settlement that benefits the most homeowners. A settlement that does not do that is simply another bailout for the banks.

Here is the full text of the article that appeared in the August 30, 2012 Des Moines Register:

Banks pay Iowans $6.7 million in mortgage settlement

The relief helps 260 Iowa homeowners who were victims of questionable foreclosure practices

by Victor Epstein

Financial help is moving to embattled homeowners under the $25 billion national mortgage settlement over foreclosure practices by some of the nation’s largest banks.

Mortgage servicers spent $10.6 billion on principal reductions, short-sales, refinancing and other borrower relief efforts from March 1 to June 30, according to a report Wednesday by settlement monitor Joseph Smith.

The help was directed at 137,846 U.S. homeowners, who received an average benefit of $76,616 each.

“More hard work remains as the banks work to meet their obligations,” Smith said in a statement.

That amount includes about $6.7 million in settlement-related relief for 260 Iowa homeowners, which averaged $25,781 each, according to the office of Iowa Attorney General Tom Miller. The disparity is partly due to the state’s lower home prices. Iowa residents are eligible for $18 million in direct relief in all.

Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial reached the deal in March, while admitting no wrongdoing. Their alleged misdeeds included the falsification of documents via so-called “robo-signing” operations.

“It’s good news that here in Iowa and across the country, we’re starting to see the banks moving generally in the right direction,” Miller said. The probe began in October of 2010 amid widespread reports of servicer misconduct.

The seeds of the housing crisis were planted from 1995 to 2005 when rising home values encouraged U.S. homeowners to borrow more, looser lending standards reduced the quality of mortgage loans, and some banks engaged in predatory lending practices. The resulting housing bubble began to deflate in 2006, helping to precipitate the 18-month recession that started in December 2007.

Many homeowners were left with mortgages that cost more than their homes were worth — a status known in the mortgage industry as being “underwater.” Widespread job losses left many homeowners in financial distress, and falling home prices and historically low sales activity left them with little chance of selling their homes for the price they paid.

The housing crisis led to such practices as “robo-signing.” The term refers to the practice of signing legal documents without reviewing them, which accelerated the foreclosure process, but sometimes led to unfair actions against homeowners. An estimated 750,000 Americans were subject to improper foreclosure procedures from 2008 to 2011.

The servicers committed to $3 billion in refinancing aid for underwater homeowners in the national mortgage settlement, which insulates them from some civil litigation by state and federal governments. They could still face criminal prosecution at all levels, said Geoff Greenwood, a spokesman for Iowa attorney general’s office.

The servicers spent $8.67 billion on short sales, which occur when an underwater borrower sells their home for less than they owe on it, according to the monitor. Idled workers saddled with an underwater mortgage generally are more likely to restrict their job searches to the area around their home. Short sales are important because they make it easier for the unemployed to pursue jobs that require relocation.

The five mortgage servicers are required to provide a minimum of $17 billion in consumer relief, but the final tally could range as high as $32 billion, according to the attorney general. An additional $5 billion was paid to the states and the federal government.

Iowa Citizens for Community Improvement objects to the heavy reliance on short sales.

“Our impression of the settlement was that (it) was meant to keep people in their homes, which a short sale does not do,” ICCI spokesman Adam Mason said Wednesday.

You should have seen the smiles on the faces of the six CCI members who proudly closed their Wells Fargo accounts this morning. And, those of the three dozen others there to cheer them on. It was a fun action!

Members moved their money and closed $30,000 in accounts in protest of Wells Fargo’s investment in private prisons, financing of payday lenders and factory farms, and the bank’s questionable lending practices leading up to the financial crisis.

“Wells Fargo has taken money from our community, and given back pain,” said CCI member Gloria Aguilar, who closed a Home Equity Line of Credit, “I will not do business with Wells Fargo until they change their practices and put people before profits.”

Aguilar and other Latino members of Iowa CCI singled out Wells Fargo’s relationship with GEO Group, one of the largest private prisons in the country. According to the GEO Group’s proxy statement dated March 23, 2012, “Wells Fargo & Company reported that, as of December 31, 2011, it beneficially owned 4,446,026 shares with sole voting power over 4,398,614 of such shares, shared voting power over 794 of such shares, sole dispositive power over 4,300,251 of such shares and shared dispositive power over 80 of such shares.”

“Private prisons make money by tearing families apart, and it’s wrong for Wells Fargo to be helping them out” Aguilar said, “all we’ve heard from Wells Fargo is ‘no!’ and we’re here today to tell Wells that we’ll be saying ‘no’ to them until they change their ways.”

Iowa CCI will continue to encourage Wells Fargo customers across Iowa to close their accounts until the bank pledges to stop engaging in activities that profit at the expense of everyday people. Our efforts are part of a national big bank Move Our Money campaign.

Here are pictures from today’s action:

Created with flickr slideshow.

Learn More

  • Interested in moving your money? Read more.
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    Click LIKE and TWEET to give Gloria, Amalia, Martina, Victor, Jess & Vanessa a virtual high five for moving their money!