Consumer Protection?

Posted by kevin on July 20, 2012 under Foreclosure Blog | Comments are off for this article

Over the last 25 years, there has been both Federal and New Jersey legislation that is to protect the consumer. Although such legislation is “on the books”, does it really protect the borrowers in mortgage related situations?

I am not so sure. Why? Because it is not enough to have a law on the books. The consumer protection law must be vigorously pursued by the appropriate enforcement agencies. That has not happened.

Last week, the Wall St. Journal ran an article that said that the SEC (which is supposed to regulate Wall St.) is pushing up against the 5 year statute of limitations in actions against investment banks and their employees for violations of the law relating to the 2008 mortgage meltdown and ensuing recession. They are rushing to file lawsuits at the last minute. Given that the actions of the large banks and Wall St went a long way to putting the US (and the world) in a terrible financial situation, to date, no investment bankers or executives at the “too big to fail” banks have been prosecuted or sent to jail. How could that be?

Also, last week, the news informed us that Barclay’s Bank was caught trying to manipulate the LIBOR by supplying false information as to interest rates. The LIBOR is used to to adjust interest rates involving adjustable rate mortgages. Articles have appeared which indicated that the Treasury Secretary had been aware of possible manipulations of the LIBOR but did nothing other than send a note to his British counterpart. Clearly, the government is protecting someone, but that someone is not you.

How could that happen? Why aren’t the staff at the SEC or the Federal Reserve doing more to protect the consumer? When I as intern at SEC enforcement years ago, my boss said when trying piece together a complex securities fraud, you had to follow the money. Well, many of the staff of these government agencies go to work for Wall St or the large when they leave government service. You draw your own conclusions.

If you are having problems with your lender, you would be naive to think that the government, whether federal or state, is going to step in to help you. You must help yourself. Make sure that you are protected (as best as you can be) by hiring competent legal counsel, experts, and the like. Your home may depend on it