Mark Winston Griffith

The Subprime Crisis: What About Us?

In an effort to put a human face on the subprime crisis here in the U.S. that is threatening their economies from across the Pacific and Atlantic Oceans, Japanese, French, British and German newspaper reporters all called me this past week looking to do profiles of subprime borrowers in distress..

But even with American, European and Asian markets taking it on the chin, it seems unconscionable that in the midst of the subprime crisis, there is so little attention being paid by law and opinion makers here in the U.S. on how to assist subprime borrowers facing foreclosure. Forget about the endless calls for homeowner education. What about rescue funds that can help people re-finance mortgages with abusive terms? What about dramatically building the capacity of foreclosure prevention lawyers who are overwhelmed and forced to turn away clients?

There's plenty of attention given to whether there is going to be a federal bail out of the subprime market, but few seem to give a damn about the shattered dreams of homeowners. It's like there's a disease poisoning millions of people and all policy makers are concerned about is how to save the food company that fed them the rotten goods.

Dean Baker made a similar point in a recent article published by CommonDreams.org and his suggestion was that the government change the foreclosure rules such that borrowers on the verge of losing their houses get to stay in their homes as renters.

While it's a great way to stave off displacement and homelessness, this proposal doesn't address the culpability of the many companies that made poorly underwritten loans or the true nature of the damage. Simply put, many homeowners received predatory loans in the first place and just don't deserve to be put out on their asses as a result. I made this argument recently on Talk Back on WBAI, highlighting the enormous transfer of wealth that is represented by the foreclosure crisis and the fact that people are being lined up, financial execution style, and being robbed of equity, savings and domestic stability.

While the wheels of capitalism are turning to save corporate America from ruin, democracy needs to step in and protect working and middle class wealth, not to mention our national humanity.

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Posted at 8:25 AM, Aug 24, 2007 in Economic Opportunity
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