Whose Mortgage Crisis? (TomPaine.com)

[marmar]

Whose Mortgage Crisis?
Anya Kamenetz
March 15, 2007


Anya Kamenetz is a freelance writer, the author of Generation Debt and a journalistic fellow of the Freelancers Union. She can be reached at her website, anyakamenetz.blogspot.com.

“A Mortgage Crisis Begins to Spiral, and the Casualties Mount,” read the headline in The New York Times last week. I clicked on the link expecting to read about the growing numbers of victims of “exploding” subprime mortgages, suddenly stuck with unaffordable payments as interest rates tick up and housing prices fall. Instead, the “casualties” of the headline were the subprime mortgage bankers and brokers, multimillionaires who are losing their red Ferrari convertibles and private jets now that the housing bubble has officially burst.

Yes, this current stock slump looks to a lot of people like the tech bust 2.0, and it may very well affect the whole economy. The economic big picture is an important angle, also explored by the Times here, here and here.

But what about the angle involving real people who are actually going to lose their homes? "Subprime" lending is a creature of our recent unprecedented era of unrestricted credit. It is the business of providing mortgages at exceptionally high interest rates to people with poor or spotty credit histories, who in this economy, tend to be lower earners, less educated and disproportionately minority. It also often has an uglier name—predatory lending.

In the just-passed era of record-low interest rates, the lenders who are now in trouble dangled homeownership before millions of people who never dreamed of such a thing before, enticing people into barely affordable contracts with low introductory rates and zero percent down, helping drive housing prices up and inflating our homeownership rate to the highest in American history. Not to mention minting money for themselves. .....(more)

The complete piece is at: http://www.tompaine.com/articles/2007/03/15/whose_mortgage_crisis.php

[sinkingfeeling]

1. How true. It's all about the poor lenders and their investors, not about the working people

who will end up homeless.

[SpiralHawk]

2. "Have come compassionate conservativism for..." - BushCo Republicon Cronies, Inc.

"...the republicon crony bankers, would you. You noisy DU proles probably have NO IDEA what it feels like to lose your red Ferarri. Have a heart. Show some compassionate conservativism."

- BushCo Republicon Cronies, Inc.

[Double T]

3. The sub-prime borrowers served their useful purpose and will NOW be.........

kicked to the curb and left homeless and penniless. The lenders deserve everything there going to get and unfortunately we will all pay a severe price for their greed and corruption. This is a wakeup call that the system inside the beltway needs a good sewer cleaning; Both sides of the aisle and k street need a good plunging and flushing.

[LiberalEsto]

4. An even uglier name

Usury

The folks losing their homes are victims of criminal lending practices.