(Sub)Priming the Slump

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Reports abound of homeowners squeezed by their mortgage companies, and foreclosure signs springing up like weeds as the housing bubble goes "pop." Surprise, surprise: this latest assault on the homeowner was facilitated by the cosy relationship, conceived in checkbook, between mortgage lenders and lawmakers. The Common Cause Education Fund connect the dots (pdf document).

 

Over a period of seven years, the mortgage industry and their $210 million in campaign contributions and lobbying expenses helped block legislation that would have cracked down on abuse of subprime lending practices; a leading factor in the astronomical rise of home foreclosure rates in the last year. Among the leading takers of mortgage industry money are former Rep. Bob Ney (R-OH) and Rep. Paul Kanjorkski (D-PA) who pushed legislation favored by mortgage companies even as they filled their coffers with industry contributions.

 

Home foreclosures hit the most financially vulnerable Americans and further depress their efforts to climb the economic ladder. Why are lawmakers acting in direct opposition to the best interests of so many of their constituents who are just trying to get ahead? You get two guesses.