Congress and the fate of the American Dream

Jessica from AFFIL here - thanks to MBG for sharing your space with Sarah and me!

I was trolling the headlines searching for morsels of information about subprime lending, predatory lending, banks and corporations taking advantage of the little guy… my usual morning routine, when I came across an intriguing headline in The New York Times: 81% in Poll Say Nation Is Headed on Wrong Track.

Despite not having any immediately striking relation to the big bad world of consumer credit and predatory lenders, the headline caught my eye, so I stopped to read on.

The poll was a nationwide telephone survey, conducted by The New York Times and CBS News. Respondents were asked to share their attitudes on a variety of issues, including the economy and overall confidence in the Nation. Rather dismal, but not all that surprising, until I came across this:

“The poll found that Americans blame government officials for the crisis more than banks or home buyers and other borrowers. Forty percent of respondents said regulators were mostly to blame, while 28 percent named lenders and 14 percent named borrowers.

In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.”

So if polls are showing that the American people are in favor of better regulation, and help for families, not CEOs, then who exactly is Congress pandering to with their watered-down housing legislation (see previous post, “No love from the Senate”)? Doesn’t it make you wonder who bought out your vote? Was it MBNA, JP Morgan or maybe Bank of America?

It’s time to get loud. It’s time to start pitching fits and taking names. I’m serious. Doesn’t this make you mad? I’m mad. Grrrr...

In the meantime, the House Democrats are wildly trying to hammer out compromises with the lending industry and gain support for their housing legislation. The principle author of the bill is Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee. Rep. Frank’s proposal would aid homeowners by allowing them to refinance risky mortgages with fixed-rate federally insured loans.

Oh, and an update on the Senate legislation: They will hold a cloture motion tomorrow (Tues. 4/8), and it is expected that the bill will pass this week. The bill, as it stands now, focuses on stimulating buying through grants to cities to rehabilitate foreclosed properties and tax breaks to builders. It also gives tax breaks to people who buy foreclosed properties (like investors and people who flip houses – because, you know, they really could use some help right now). Since the removal of Title IV, what it doesn’t do is keep families in their homes. Click here for a list of the Senators who voted to get rid of the best part of the bill – yours might be on the list.

Let’s hope the American Dream fares better in the House than it did with the Senate.