The federal government wants us all to get smarter about how we spend and save our money. So, a new Office of Financial Literacy – part of the newly-signed financial reform bill – will develop programs meant to educate the American public on savings and loans.
The office is expected to create standards for financial advice programs and to help people find ways to avoid financial scams. Financial literacy is being promoted separately by other groups, too. The LendingTree Foundation, for example, is a recently-created non-profit organization that provides counseling to families in financial turmoil.
In Washington, D.C., Michael Barr, Assistant Secretary for Financial Institutions, told us in a phone press conference yesterday that the government’s financial literacy outreach is meant to help “individuals take the necessary steps to make themselves better educated about what it means to save and borrow, and to conduct the basic transactions in life.”
The attention on financial literacy is part of a much larger scope of consumer protections and other legislation that is meant to prevent a repeat of the recent housing and loan implosion that has repurcussions to this day. President Obama signed the legislation this week. A consumer cornerstone of this legislation is the creation of a Consumer Financial Protection Bureau. As part of the Federal Reserve, the bureau would have regulatory powers over lending activities.
Other consumer-focused aspects of the bill include:
- Mortgage lending changes that will make it harder for consumers to be hit with high fees and bad loan terms
- Capped fees on debit cards that could result in merchants passing on savings to consumers
- The elimination of most mortgage loan pre-payment penalties
- The creation of a simplified mortgage disclosure form
Only three Senate Republicans voted with 57 Democrats to support the bill, which was a highly bi-partisan issue. Republicans have criticized the bill for increasing the government’s involvement in regulating financial issues and have said the legislation will lead to a bloated bureaucracy. Others say the bill could have unintended consequences that actually hurt consumers as financial institutions look for alternative ways to make up for lost revenue. For example, loans could become more expensive and debit card reward programs could take a hit as banks try to make up for the debit fee caps.
You can learn more about the bill from the Mortgage Bankers’ Association. MoneyTalksNews has a rundown on some of the bill’s main points, and so does FinancialHighway blog. Also, you can read “Will Reform Bill Protect Consumers from Mortgage Abuse?” on the LendingTree blog.
-By Anna Cearley, LendingTree/Tree.com
Photo credit: Adrian van Leen for openphoto.net (public domain)
What do you think about the financial reform bill – will it help or hurt consumers?
Hi Anna, I recently got a call from my lender, Wells Fargo, about using HARP, Housing Assistance and Recovery Program. WFHM doesn’t have the best rates, but another lender said only my current lender could use HARP (I may be a bit underwater in my loan value). Any thoughts?
I don’t see a search bar on your page so sorry if you’ve covered this already.
Hi! For starters, you might want to take a look at this LendingTree blog post: http://blog.lendingtree.com/2010/04/harp-hamp-and-hafa-whats-the-difference/
And I will check around with our experts here to see what they say about the “current lender” part of your question.
The Home Affordable Refinance is designed to assist a large number of borrowers who are current on their mortgage payments; however, not all borrowers or all loans will qualify for a Home Affordable Refinance. For example, borrowers may not qualify due to income or credit requirements, including the capacity to continue paying monthly mortgage payments at the new loan amount. In other instances, the loan itself may not meet the eligibility criteria for the program.
Further, in addition to Freddie Mac’s requirements for a Home Affordable Refinance, lenders participating in the program may have additional and differing requirements that you must meet in order to be eligible.
For example:
If you are underwater (Owe more than it is appraised) as stated the most we would be able to refinance is 105% of the amount owed. So, if you owe $105,000 and your appraisal comes in at $100,000 we (Any lender)would be able to help you as long as you do not have PMI (Private Mortgage Insurance)If you do have it, than only your current servicer is able to help you. The key here is PMI.
Should you need help go to FaceBook http://www.facebook.com/elidror
Thank you.
Thanks for your response, Eli! For those of you who don’t know, Eli Dror is part of LendingTree’s network of lenders. We have lots of knowledgeable and fantastic people like Eli in this network, so if you are in the market for a refinance or new loan you can also connect with them through our competitive loan process. If you fill out the corresponding form, we can connect you with multiple lenders who compete for your business with customized loan offers.
To purchase a home: http://www.lendingtree.com/jumppages/jumpto-purchasemortgage.asp?esourceid=4351280
Refinance: http://www.lendingtree.com/jumppages/jumpto-RefinanceMortgage.asp?esourceid=4351280