But that's OK, because heaven forbid anyone ever offers regulation because the finance industry that is taking the system to the verge of a crash might not like it. The MIA Republicans have made it their gospel to allow industry - any industry that's willing to fork over campaign cash - to self regulate, telling supporters that government regulation only complicates matters and that the government has made a mess of everything. Take one guess who will be first in line with their hands out, asking for money when the system they built comes crashing down?
While the housing market was soaring, lenders shrugged off borrowers' problems because the value of the property was rising. But now that the housing market is in a tailspin in some areas, as many as 2.2 million people could end up losing their homes, worth a total of $164 billion, according to CRL. Another report, by Lehman Brothers, concluded that as many as 30 percent of people who obtained subprime loans in 2006 may end up defaulting on them.Republican economics at work and another case study in how to give the shaft to consumers while coddling political donors.
"Many families are going to lose their homes," says Deborah Goldstein, executive vice president of the CRL in Durham, N.C. "There's a need for federal regulators to address the kinds of abusive mortgage practices that we're seeing."
Last fall federal regulators started to step in, requiring lenders to disclose more clearly the benefits and risks of some subprime loans to borrowers. On Tuesday, Freddie Mac, a quasi-public backer of home loans, announced it would cease purchasing the riskiest subprime mortgages. This week, Fannie Mae, another quasi-public housing organization, said it is working on "rescue" products to try to help troubled borrowers.
Housing advocates believe the regulators are reacting too late. "They're good positive steps but it's not close to being enough – the genie's already out of the bottle," says Mr. Rheingold. "What we're seeing now with the incredibly high foreclosure rates ... is a product of the complete deregulation of the mortgage industry over the last 10 to 15 years."
