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In case there were any lingering expectations that government might play a role in cleaning up the subprime lending mess, here are excerpts from two articles that document the industry’s generous contributions to lawmakers at the state and federal levels. <strong>New Century </strong>was particularly implicated in using donations to prevent legislation that might have rained on their subprime parade.
From the <em>San Francsico Chronicle</em>, May 23, 2007, p. A1
“As other states adopt stricter regulations on subprime lending practices, California has not rushed to restrict an industry that spent $17.9 million in campaign contributions and on lobbying in the state during the past four years.
A Chronicle analysis of spending by top subprime lenders shows that 65 Democratic and 49 Republican lawmakers in the state have received $1.2 million since 2003. The companies also donated $1.3 million to Gov. Arnold Schwarzenegger and spent $5.8 million on lobbying, according to records on file with the secretary of state. Other state political candidates, political parties and ballot measure committees also received hefty sums.
Regulators and lawmakers across the nation have scrambled in recent months to stem the tide of foreclosures prompted by the crisis in the subprime lending market. But in California, consumer groups say the response among regulators and lawmakers to try to prevent future subprime meltdowns has been timid at best…
Here is how much they gave between 2003 and 2006:
Ameriquest Mortgage: $8.2 million
Countrywide Financial: $1.5 million
Citigroup: $1.2 million
Wells Fargo Home Mortgage: $504,481<tt> </tt>
<tt><strong>New Century Financial: $118,774</strong></tt><tt>”</tt>
<tt> </tt>
<tt>Similarly, an article in <em>The Nation</em></tt> <strong> </strong>notes that<strong>, </strong>
<strong>“</strong>The mid-March collapse of the nation's second-largest subprime mortgage lender caused a panic in the financial markets and sparked calls for regulating the high-interest predatory loans given to those with bad credit. But much of the damage has already been done, with millions of homeowners facing foreclosure at the hands of an industry allowed to run wild. As its business has exploded--last year subprime loans grew into a $600 billion industry, more than triple the 2002 volume and accounting for one-fifth of all mortgages--the predatory mortgage industry has done its best to make sure Congress wouldn't rein it in, spreading its largesse to Democrats and Republicans: <strong>Nearly half of House Financial Services Committee members, including chairman Barney Frank, have received money from New Century Financial Corp., the subprime lender that recently collapsed.</strong> Democratic presidential candidates Hillary Clinton and Chris Dodd, head of the Senate Banking Committee, have been some of the largest beneficiaries of the mortgage banking industry, whose dollars have provided a strong incentive for Congress to sit tight and hope the subprime bubble wouldn't burst.”<tt> (</tt><a href="http://www.thenation.com/doc/20070409/ordower">http://www.thenation.com/doc/20070409/ordower</a>
From the <em>San Francsico Chronicle</em>, May 23, 2007, p. A1
“As other states adopt stricter regulations on subprime lending practices, California has not rushed to restrict an industry that spent $17.9 million in campaign contributions and on lobbying in the state during the past four years.
A Chronicle analysis of spending by top subprime lenders shows that 65 Democratic and 49 Republican lawmakers in the state have received $1.2 million since 2003. The companies also donated $1.3 million to Gov. Arnold Schwarzenegger and spent $5.8 million on lobbying, according to records on file with the secretary of state. Other state political candidates, political parties and ballot measure committees also received hefty sums.
Regulators and lawmakers across the nation have scrambled in recent months to stem the tide of foreclosures prompted by the crisis in the subprime lending market. But in California, consumer groups say the response among regulators and lawmakers to try to prevent future subprime meltdowns has been timid at best…
Here is how much they gave between 2003 and 2006:
Ameriquest Mortgage: $8.2 million
Countrywide Financial: $1.5 million
Citigroup: $1.2 million
Wells Fargo Home Mortgage: $504,481<tt> </tt>
<tt><strong>New Century Financial: $118,774</strong></tt><tt>”</tt>
<tt> </tt>
<tt>Similarly, an article in <em>The Nation</em></tt> <strong> </strong>notes that<strong>, </strong>
<strong>“</strong>The mid-March collapse of the nation's second-largest subprime mortgage lender caused a panic in the financial markets and sparked calls for regulating the high-interest predatory loans given to those with bad credit. But much of the damage has already been done, with millions of homeowners facing foreclosure at the hands of an industry allowed to run wild. As its business has exploded--last year subprime loans grew into a $600 billion industry, more than triple the 2002 volume and accounting for one-fifth of all mortgages--the predatory mortgage industry has done its best to make sure Congress wouldn't rein it in, spreading its largesse to Democrats and Republicans: <strong>Nearly half of House Financial Services Committee members, including chairman Barney Frank, have received money from New Century Financial Corp., the subprime lender that recently collapsed.</strong> Democratic presidential candidates Hillary Clinton and Chris Dodd, head of the Senate Banking Committee, have been some of the largest beneficiaries of the mortgage banking industry, whose dollars have provided a strong incentive for Congress to sit tight and hope the subprime bubble wouldn't burst.”<tt> (</tt><a href="http://www.thenation.com/doc/20070409/ordower">http://www.thenation.com/doc/20070409/ordower</a>