The Subprime Lobby
Dec 31st, 2007 at 7:47 am by Susie
I think we can all see at this point what happens when you let corporate power run amok:
During the housing boom, the subprime industry succeeded at more than just writing mortgages. It also shot down efforts by some states to curtail risky lending to borrowers with spotty credit.
Ameriquest Mortgage Co., until recently one of the nation’s largest subprime lenders, was at the center of those battles. Working with a husband-and-wife team of Washington lobbyists, it handed out more than $20 million in political donations and played a big role in persuading legislators in New Jersey and Georgia to relax tough new laws. Those victories, in turn, helped blunt efforts by other states to crack down on reckless lending, critics of the industry contend.
Home loans made by Ameriquest and other subprime lenders are defaulting now in large numbers, roiling global credit markets and sparking debate about whether regulators and lawmakers should have anticipated the mess and taken action. A close look at Ameriquest’s lobbying and political donations shows how the subprime industry maneuvered to defeat legislation that might have contained some of the damage.
Executives at Ameriquest, based in Orange, Calif., acknowledge that the company lobbied heavily against state lending restrictions, but say that other subprime lenders did so as well. In fact, a host of subprime lenders and banking trade groups, including Citigroup Inc., Wells Fargo & Co., Countrywide Financial Corp. and the Mortgage Bankers Association, spent heavily on lobbying and political giving.
My father fell victim to these predatory lending practices, and he sought my help to fight a foreclosure. Little did I know that my father would end up at loggerheads with the “public relations” (i.e., lobbying) department of the large regional law firm employing me at the time. Since my father’s fight to keep his home was “inconsistent with the firm philosophy” of lobbying for predatory lenders, I had to leave that firm. Since then, their former managing partner has ignored a congressional subpoena and faces contempt of congress charges. Moral: even lawyers are supposed to have ethics, and eventually the truth will prevail. Unfortunately, the unethical often drag down others before everything shakes out.
“Lobbyists”?
Why don’t we call them what they are, using the colorful and descriptive term coined by another branch of organized crime: “bagmen”.
Jim Carroll
Jim Carroll,
Could not agree more with you, in reference to the ” Bagmen”
While people suffer to make there morgage payments.
Who benifits from this. The “Fat Cats”seating in congress.
Totally Bloody Greed.
Ed Noctor.
So now we await another round of congessional guilt tripping which will add more regulations AND COSTS to the process of buying a home. Instead, why not ban politcal contributions of more than $500 from everyone? This would include business lobbies and other organizations, including unions. Make it easy for congressmen to say ” I am beholden to no one”.