Post by unlawflcombatnt on Jan 7, 2008 7:05:49 GMT -6
from Patrick.net
(originally from Rawstory.com)
Subprime lenders spread lobbyists & cash around government
12/31/2007
by Nick Juliano
"As state governments around the country were trying to regulate subprime lending practices that critics say were responsible for this year's mortgage meltdown, the subprime industry was spreading cash and gifts to lawmakers in a dozen states.
The Wall Street Journal's Glenn Simpson details the case of Ameriquest Mortgage Co., reporting the company worked with a married pair of DC lobbyists to spread more than $20 million in political donations in states considering subprime regulations....
"Home loans made by Ameriquest and other subprime lenders are defaulting now in large numbers, roiling global credit markets and sparking debate about whether regulators and lawmakers should have anticipated the mess and taken action," Simpson reports. "A close look at Ameriquest's lobbying and political donations shows how the subprime industry maneuvered to defeat legislation that might have contained some of the damage."
The industry lobbying focused on state governments since at least 2001. At the federal level, members of the until-recently GOP Congress -- who had received $645,00 in donations from subprime lenders -- didn't seem too interested in enacting new oversight of the industry.
"What seemed to be developing in the states was that there was going to be a wave of legislation," lobbyist Wright Andrews, who coordinated the industry's lobbying operation with hiw wife, Lisa, told Simpson.
Although Andrews...ran three different subprime-industry trade groups: the National Home Equity Mortgage Association, of which Ameriquest was a member; the Coalition for Fair and Affordable Lending, which spent $6.3 million lobbying against state laws before it dissolved earlier this year, according to federal filings; and the Responsible Mortgage Lending Coalition. Lisa Andrews was a senior vice president in Ameriquest's lobbying division from 2003 to 2005.
Ameriquest's state-level lobbying focused on Georgia after the state passed its Fair Lending Act in 2001. The act required lenders to provide a "tangible net benefit" to borrowers when it refinances loans less than five years old.
Ameriquest became "very, very engaged,"...to get the law changed, Georgia state Sen. Vincent Fort told Simon....
After the law was passed, Ameriquest and other lenders began spreading campaign donations and tickets to lawmakers there. Less than a year later, in October 2002, Ameriquest announced it would stop doing business in the state unless the law changed;
the ratings house Standard & Poor's Corp. said it would stop rating mortgages there.
The subprime industry essentially said it would no longer do business in the state until the law changed, Simon reports. Georgia's state House and Senate voted within months to remove the "net benefit" provision Ameriquest objected to.
The industry worked together to roll back a similar effort in New Jersey. Simon reports that two of the recipients -- Republican Gerald Cardinale and Democrat John Adler -- introduced a bill "to make changes sought by the industry," in December 2003, less than 2 months after receiving Ameriquest donations....
As the Wall Street Journal documented how industry-influenced governments failed to head-off the negative impacts of the subprime lending crisis, new market data revealed that sales of new homes plummeted to their lowest level in more than 12 years.
"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying.""
(originally from Rawstory.com)
Subprime lenders spread lobbyists & cash around government
12/31/2007
by Nick Juliano
"As state governments around the country were trying to regulate subprime lending practices that critics say were responsible for this year's mortgage meltdown, the subprime industry was spreading cash and gifts to lawmakers in a dozen states.
The Wall Street Journal's Glenn Simpson details the case of Ameriquest Mortgage Co., reporting the company worked with a married pair of DC lobbyists to spread more than $20 million in political donations in states considering subprime regulations....
"Home loans made by Ameriquest and other subprime lenders are defaulting now in large numbers, roiling global credit markets and sparking debate about whether regulators and lawmakers should have anticipated the mess and taken action," Simpson reports. "A close look at Ameriquest's lobbying and political donations shows how the subprime industry maneuvered to defeat legislation that might have contained some of the damage."
The industry lobbying focused on state governments since at least 2001. At the federal level, members of the until-recently GOP Congress -- who had received $645,00 in donations from subprime lenders -- didn't seem too interested in enacting new oversight of the industry.
"What seemed to be developing in the states was that there was going to be a wave of legislation," lobbyist Wright Andrews, who coordinated the industry's lobbying operation with hiw wife, Lisa, told Simpson.
Although Andrews...ran three different subprime-industry trade groups: the National Home Equity Mortgage Association, of which Ameriquest was a member; the Coalition for Fair and Affordable Lending, which spent $6.3 million lobbying against state laws before it dissolved earlier this year, according to federal filings; and the Responsible Mortgage Lending Coalition. Lisa Andrews was a senior vice president in Ameriquest's lobbying division from 2003 to 2005.
Ameriquest's state-level lobbying focused on Georgia after the state passed its Fair Lending Act in 2001. The act required lenders to provide a "tangible net benefit" to borrowers when it refinances loans less than five years old.
Ameriquest became "very, very engaged,"...to get the law changed, Georgia state Sen. Vincent Fort told Simon....
After the law was passed, Ameriquest and other lenders began spreading campaign donations and tickets to lawmakers there. Less than a year later, in October 2002, Ameriquest announced it would stop doing business in the state unless the law changed;
the ratings house Standard & Poor's Corp. said it would stop rating mortgages there.
The subprime industry essentially said it would no longer do business in the state until the law changed, Simon reports. Georgia's state House and Senate voted within months to remove the "net benefit" provision Ameriquest objected to.
The industry worked together to roll back a similar effort in New Jersey. Simon reports that two of the recipients -- Republican Gerald Cardinale and Democrat John Adler -- introduced a bill "to make changes sought by the industry," in December 2003, less than 2 months after receiving Ameriquest donations....
As the Wall Street Journal documented how industry-influenced governments failed to head-off the negative impacts of the subprime lending crisis, new market data revealed that sales of new homes plummeted to their lowest level in more than 12 years.
"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying.""