Reverse Mortgage Loan Blog

Leftist groups with ties to George Soros and other big-money donors of the Obama Administration are pressuring Democrat House committee aides and legislators to demand Congressional hearings on the reverse mortgage industry. Those companies’ profiles have been raised over the past six months, in part, due to extensive cable TV and radio advertising. In fact, over the summer, Mother Jones and the left-wing George Soros-funded Media Matters launched attacks against American Advisors Group (AAG), a firm that markets reverse mortgages.

A reverse mortgage is a type of home loan marketed to seniors that allows them to draw cash on the home equity that built up over years of mortgage payments they have paid. The lender typically requires no repayment until the homeowner no longer uses the home. In fact, the Obama Administration’s Department of Housing and Urban Development offers a reverse mortgage program similar to those advertising in today’s tough economic climate.

The timing of the attacks and the attempt to use the summer media reports to push for congressional activity is not a coincidence. “The story gets planted on a website, and then Media Matters picks it up and tries to make a mountain out of a molehill, and then groups like Free Press or the Center for American Progress or Citizens for Responsibility and Ethics in Washington (CREW) jump in and push the story into the more political arena,” says a former MoveOn.org staffer.

According to political consultants who have in the past coordinated with the leftist and secretive Democracy Alliance as well as a number of other leftist donor organizations, such as the New Progressive Coalition, the Progressive Donor Network, the Arca Foundation and Proteus Fund, many of them with ties to George Soros, among others, the attacks on AAG, as well as other companies that advertise on Fox News and conservative talk radio, are largely being coordinated by the political operations with ties to left-wing media.

“There isn’t a single progressive publication, think tank or blogger who wouldn’t kill to tap into the connections and money that is sitting out there from the Alliance or any of those groups,” says a former political consultant who is now a member of the Obama Administration. “If Soros or one of the Alliance members wants something done — or someone thinks it will help them connect to the Alliance or one of the donors — it usually gets done.”

In this case, the attacks on the reverse-mortgage industry, and AAG in particular, appear to be for the pleasure of Herbert and Marion Sandler, billionaires and the former co-CEOs of Golden West Financial. Until 2006, Golden West operated as the World Savings Bank, which was one of the innovators of the so-called “pick a pay” mortgage. Under the terms of such a loan, homeowners were allowed to pay less than the amount of interest being charged, sometimes for as long as a decade. The Sandlers never had to deal with the fallout of such loans. They sold their institution to Wachovia in 2006 for billions, and the rest is history.

The Sandlers have used their profits to join forces with leftist Soros in the Alliance, among other entities, which help fund just about every left-wing entity with ties to the Obama Administration, including MoveOn.org, Free Press, and Media Matters. Marion Sandler has served on the board of the Center for American Progress, and the Sandlers recently donated $10 million for the creation of ProPublica, a nonprofit, left-leaning investigative journalism operation founded by former employees of the Wall Street Journal.

In the case of AAG, some of the attacks and research against the business appears to have been generated by individuals with ties to the Center for Responsible Lending (CRL) and its for-profit network of affiliated credit unions and lending funds known as the “Center for Community Self-Help.” Self-Help pushes subprime lending programs, while the Center for Responsible Lending attacks other for-profit loan programs. Its website has linked to a number of article warning consumers against reverse mortgages, claiming that industry is the next subprime disaster.

Besides the Sandlers, the another major private donor for CRL is notorious hedge-fund operator John Paulson, whose company paid Goldman Sachs to structure a transaction in which Paulson & Co. took short positions against mortgage securities that Paulson’s firm thought might be ripe for collapse, but which were sold to Goldman clients as longer-term investment vehicles. Paulson won big; Goldman clients lost. Paulson gave CRL $15 million three years ago, and according to an ethics complaint filed against CRL, some of those funds were used by CRL to lobby Congress. Paulson was not a part of the ethics complaint.

Back in 2007, CRL lobbied Congress for legislation blocking such loan programs as short-term “payday” loans, has lobbied for and supported the Obama Administration’s financial services reform agenda, and sources say, there is a move afoot to fund a campaign that would encourage Congress to look at the reverse-mortgage industry. Perhaps most notoriously, CRL and its for-profit partner have had extensive ties to Association of Community Organizers for Reform Now (ACORN), to promote their home-mortgage programs.

Now, beyond the attacks on reverse mortgages, the Soros- Sandler-backed groups also plan to coordinate a campaign against renewal of the Bush tax cuts, and in support of greater stimulus spending by the federal government.

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