Money Facts Archive Get the real facts that will shape your future by having them delivered to your Inbox!

In an August 26,2009 article entitled "Subprime Lenders Getting U.S. Subsidies, Report Says" by Washington Post Staff Writer Renae Merle, it was revealed that:

"Many of the lenders eligible to receive billions of dollars from the government's massive foreclosure prevention program helped fuel the housing crisis by issuing risky subprime loans, according to a report to be issued Wednesday by the Center for Public Integrity. Under the $75 billion program, called Making Home Affordable, lenders are eligible for taxpayer subsidies to lower the mortgage payments of distressed borrowers. Of the top 25 participants in the program, at least 21 specialized in servicing or originating subprime loans, according to the center, a nonprofit investigative reporting group funded largely by charitable foundations. Much of this money is going directly to the same financial institutions that helped create the sub-prime mortgage mess in the first place," Bill Buzenberg, executive director of the center, said in a statement. For example, J.P. Morgan Chase, Wells Fargo and Countrywide, which has been bought by Bank of America, are eligible to receive billions of dollars under the program, according to the report."

Renae Merle also comments on some disagreements with the report:

"The report has drawn fire from lenders. It oversimplifies the causes of the housing crisis and misses the complexity of the markets, said Scott Talbott, chief lobbyist for the Financial Services Roundtable, which represents some of the nation's largest lenders. Lenders are working hard to help millions of homeowners through the federal program and other foreclosure prevention efforts, Talbott said."

This is a disingenuous position at best. It would be much closer to the truth to say that lenders want to foreclose on every home they can; especially if the home is underwater and is financed by a toxic asset (i.e. a mortgage product that was custom made for the "Wall Street shuffle").

Uncle Sam, of course, wants this all swept under the rug. Whether or not folks lose their homes appears to be a secondary consideration at best.

Apparently, owning a home is no longer part of the American Dream.

- Ed Smith