Attack of the Mortgage Vultures (The Progressive, via AlterNet)

[marmar]

Attack of the Mortgage Vultures

By Matthew Rothschild, The Progressive. Posted April 5, 2007.



Over the last decade, we have been witnessing some of the most brazen acts of mortgage entrapment ever to hit the American housing market.

George Bush likes to boast about the high rates of homeownership. But today in America, millions of homeowners are at risk of seeing their prized possession taken right out from under them.

Over the last decade, we have been witnessing some of the most brazen acts of mortgage entrapment ever to hit the American housing market.

Subprime lenders have coaxed eager consumers to buy or refinance their homes often with no money down, and at seemingly low interest rates. But now millions of homeowners are paying way more than they can afford.

Their dream of homeownership has quickly turned into a nightmare of foreclosure.

And this nightmare is beginning to rattle the economy as a whole.

All the while, the government has stood idly by.
...(snip)...

Ironically, the Fed all along could have done something about the predatory practices in the subprime market. In 1994, Congress passed the Home Ownership and Equity Protection Act. It gives the Fed the authority to “prohibit acts or practices in connection with—(A) mortgage loans that the Board finds to be unfair, deceptive, or designed to evade the provisions of this section; and (B) refinancing of mortgage loans that the Board finds to be associated with abusive lending practices, or that are otherwise not in the interest of the borrower.”

But the beatified former Fed chief Alan Greenspan was not all that concerned about the interest of the borrower. His interest lay with the financiers, so he hailed subprime lending as the “democratization of credit.” In fact, as Senator Christopher Dodd noted at a recent hearing, the Fed actually “seemed to encourage the development and use” of adjustable rate mortgages “that today are defaulting and going into foreclosure at record rates.” .....(more)

The complete piece is at: http://www.alternet.org/story/50120/