You have to wonder why the Federal Reserve wants to propose new consumer ptoections for borrowers — but not for senior citizens.

The new plan from the the Federal Reserve — as first reported here — specifically excludes reverse mortgages from the proposed consumer protections.

Now you might think, aha, those smart folks at the Federal Reserve, they must be excluding reverse mortgages because such loans are not associated with predatory lending. Isn’t this so?

Nope.

Here’s what the FBI says in its 2006 Financial Crimes Report To The Public:

“The defrauding of mortgage lenders should not be compared to predatory lending practices which primarily affect borrowers. Predatory lending typically effects senior citizens, lower income and challenged credit borrowers. Predatory lending forces borrowers to pay exorbitant loan origination/settlement fees, sub-prime or higher interest rates and in some cases, unreasonable service fees. These practices often result in the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing.”

This entry was posted on Thursday, December 20th, 2007 at 2:36 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.