March 6, 2007

Subprime Crisis: Old News

Subprime mortgage defaults have been moved into the news spotlight as a result of recent stock market "corrections." The recent stock drops were caused, in part, by concern that major US commercial banks, pension funds and trusts might be financially exposed to subprime mortgage woes.

But the "news" about a crisis in the subprime mortgage market is actually old. The Oct-Sept issue of Mother Jones magazine carried a piece entitled, "Prime Suspect." It exposes the makings of another Savings and Loan crisis that might be unraveling.

The piece opens:

Cleveland is on the front lines of a housing boom gone soure. So how are the bankers, brokers, and speculators still generating massive profits?

Good question. Meanwhile, the article describes people's lives being ruptured. Robert Perry's mortgage holder, Bank One, moved to foreclose on his home of 14 years when he came up $250 short on a debt settlement payment of $2,565. Barbara and Rober Anderson, in Cleveland's Slavic Village, watched the houses in their neighborhood go vacant as 376 houses were foreclosed upon in 2005. For all of Cuyahoga County, there were 11,000 foreclosures.

Sheriff's auctions of homes are common, and the banks are buying back some houses at bargain prices. The courts are so full, and the predatory stories so sad, that some judges are throwing out cases for typos and minor errors in a show of resistance. Referring to defaults, Chief Magistrate Stephen Bucha says, "It started because of changes in lending practices," enabled by the U.S. Congress.

Since Congress won't want to take the blame, they will down-play the growing significance of the corrupt real estate market, and pass off the costs to the tax-payer... unless we don't let them.

Contact the Media:

You can be sure the right-wingers would be firing off e-mails to corporate media offices if they were in our shoes. So, tell the media outlets that "we want you to cover the corruption associated with the unraveling Subprime Mortgage Crisis."

CLICK: Media Contacts


Mother Jones Magazine, "Prime Suspect," By Alyssa Katz, September/October 2006 Issue.

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