Mark Winston Griffith

Bush, Wall Street and the Mortgage Industry Need to Save More Homes for the Holidays

Two articles on the front page of the Thursday, December 6, 2007 New York Times speak volumes about the subprime universe that is swallowing the American economy.

One describes separate S.E.C. and New York attorney general inquiries into the practices of the Wall Street firms that helped prop up the subprime industry. In question is how appropriate or even legal it was for Wall Street firms, like Goldman Sachs, to play all sides of the investment fence, which included packaging mortgage backed securities, selling their investments to clients, and making money on their own holdings - while simultaneously divesting themselves of its mortgages and mortgage securities. For more details on this rather complex issue, read Kevin Conner's Wall Street and the Making of the Subprime Disaster.

These issues were the focus of a national campaign to hold Wall Street accountable for the foreclosure crisis, a campaign which included last week's march on Wall Street organized by the Northwest Bronx Community and Clergy Coalition, the NYC Anti-Predatory Lending Task Force and NEDAP. Look for more governmental and media scrutiny into Wall Street's role in the foreclosure crisis in the weeks to come.

Right next to the article on Wall Street in the Times was a piece on the agreement between the Bush administration and the mortgage industry to freeze interest rates for up to five years for a subset of subprime loan borrowers. While the Bush administration says that over a million people will be covered by the proposal, the Center for Responsible Lending puts the number closer to one hundred thousand homeowners.

Of course the Wall Street Journal and other conservative free-marketeers are decrying what they consider to be the Bush Administration's heavy hand in addressing the foreclosure crisis. Democrats and homeowner advocates however understand that this plan by the mortgage industry, while certainly a welcomed step, doesn't come close to representing the kind of governmental and industry intervention that homeowners need and deserve.

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Posted at 11:00 PM, Dec 06, 2007 in Economic Opportunity
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