Given the subprime mortgage debacle, where was the senate committee?

Question

See senator Dodd's 3/22/07 opening statement. His committee was relying on the industry to monitor itself to protect the consumer? Why were they not proactive and doing investigation prior to a "debacle" occuring? What does the money trail show relative to their responsibities and political contributions? If they are an after the fact committe, what good are they?

Answer 1

Enjoying themselves in their mansions!

Answer 2

Bill, I have to say this about the subprime mortgage meltdown:

As a homeowner, I know that when you are applying for a mortgage, the entity that is loaning you the money has a legal obligation to disclose to you all the costs associated with the mortgage. You are able to calculate precisely what your payments will be, and this holds true for all mortgages, even Adjustable Rate Mortgages (ARMs) written by the sub-prime lenders.

Everyone with the sense that god gave a gnat knows that you do NOT sign contractual documents that you do not understand. If you are applying for a mortgage and do not understand the terms and conditions of the mortgage, you ask the lender to explain them to you; if you do not understand, or the lender will not explain them to you in a way that you do understand, you do not sign. It's that simple.

If someone signs a mortgage with an adjustable rate that will eventually increase to an amount they cannot afford, then they are either gambling that somehow they will be able to refinance to a rate they can afford, or that they will sell before that happens and make money on the equity they've accumulated through appreciation of the house, or they are just plain as dumb as a box of rocks and ought not to be allowed to do anything without the assistance of a conservator.

Most of the people who have been harmed by the subprime meltdown are just plain greedy or stupid. They signed up for something they either didn't understand, in which case they should not have signed, or they gambled and lost.

I do not feel sorry for them.

The so-called subprime "debacle" involves less than 1% of the paper that's been written against houses in the last few years. It is not quite the catastrophe that the news media make it out to be.

Some people who got in early and sold their homes before the bubble burst made out like bandits. Some people lost, big-time.

You can't protect people from their own greed and stupidity. Never have been able to, never will.

Answer 3

The blame lies squarely with the industry for being greedy and with the Department of Housing and Development for fostering an environment that allowed the crisis to happen.

Generally, Congress delegates rulemaking authority via enabling statutes to administrative agencies. In this case, the rules that govern the industry are made by the Department of Housing and Urban Development. If things go wrong, Congress uses its oversight power to investigate and, if necessary, to pass more statutes to direct HUD to promulgate certain rules. The actual detail of the rules will be worked out by HUD. The cycle then continues ... .

Answer 4

Perfect example of liberal thinking that the governement can protect them from every thing that people do in their lives. I hate to repeat another's answer, but READ and UNDERSTAND what you are signing! I have two homes and have successfully refinanced, taken out seconds, refinanced seconds and knew exactly what I signed for every time. I do NOT want to pay taxes into a governement that is going to "bail" out the stoopid, ignorant, or foolish through all the mistakes they make in life.

Answer 5

It only became a "debacle" AFTER the fat cats got theirs. The outrage is pure political posturing. To me, they were putting the fox in charge of the henhouse. Too much power corrupts anyone if the price is right.

Answer 6

Follow dodd's contributors? May be easier to get numbers from the fed on prevalence of sub prime loans in the member's districts.
I bet it would be surprising.

Answer 7

Simple answer Out to Lunch.