McCaskill questions FTC about subprime lending aftermath

McCaskill called on the FTC to investigate companies that use promises of help to take money from Americans who are facing foreclosure.

Daunting data

According to a recent report from Congress’s Joint Economic Committee, 19,594 Missouri families could lose their homes by the end of 2009 due to subprime mortgages, with 2 million foreclosures expected nationwide.

In Missouri alone, the economic cost of these foreclosures is predicted to exceed $806 million.

McCaskill has held foreclosure clinics for Missourians in Kansas City and St. Louis to provide homeowners with advice, information and answers to questions on their financial options regarding subprime mortgages and foreclosures and is planning a clinic in the Springfield area on June 7.

“As we would say in Missouri, ‘The cow’s out of the barn,’” McCaskill said in a news release. “We now have to prevent these going forward.

“The same people that were vulnerable to these subprime loans are vulnerable to the scams that are coming after the subprime loan debacle,” McCaskill added.

Reverse mortgages

The senator also asked what the FTC is doing to address aggressive marketing of reverse mortgages to seniors.

Increasing numbers of seniors are tapping their home equity with reverse mortgages (see related story on page 11) but McCaskill wants to help make sure they get the product they’re seeking. She is concerned because some salespeople market them as a government benefit, sometimes combining reverse mortgages with annuities that won’t mature within the borrower’s life span.

“I would like to know specifically from you what the FTC is doing to look at these reverse mortgage firms and look at their marketing techniques,” McCaskill told the subcommittee. “We saw in a hearing (of the Senate Special Committee on Aging) that companies were marketing annuities in tandem with a reverse mortgage – with no shame – to 80-year-old people.”

McCaskill’s involvement with that committee led to her interest in reverse mortgages.

The Senate passed a McCaskill provision in April that would boost protection for seniors who are considering reverse mortgages, according to the release.

That provision was added as an amendment to the Foreclosure Prevention Act. Similar legislation has been introduced in the House of Representatives.

Local Foreclosure Clinic

According to officials with U.S. Sen. Claire McCaskill’s office, she will host a foreclosure clinic in Springfield on June 7 at Ozarks Technical Community College. For information, call (417)

868-8745.[[In-content Ad]]