I would like to read the article, but it's at a gated internet community-or has a toll booth- take your analogous pick - either way, I can't get in. The only way to enter past the second page of the article seems to be to pay the $9 entry fee.

But glad to see Chris Dodd covering this issue. The real shit that this problem will create hasn't even started to hit the fan yet.

I will give the Bush Administration credit. Unlike the "Healthy Forests" initiative and similar sounding programs, the ownership society really did describe the plan. Of course, the owners weren't home buyers. The owners were Bush's big money friends. Even they will eventually lose on this one I think.

Thanks for the heads-up, Buck. I just changed the link so that now the entire article is accessible.

Quite a number of years ago when I was a young lawyer I worked at a law firm that handled loan closings for sub-prime lenders -our biggest customer got gobbled up by one of the big banks years later. This was in the day when sub-prime meant "low income". Real estate loans at 36% secured by the home were not uncommon. It involved a lot of traveling for my law firm, as the "finance company" as they were called then wanted a lawyer to be a witness to every loan closing. The loan closings were typically done "on premises" at the finance company. I still remember one of the finance company managers doing a little dance after one poor young couple walked out of the door after having signed up for credit life insurance for a particularly large loan (the premium to the finance company on these insurance policies approached 90% of the cost to the borrower-all financed on the 36% loan, of course). That scene still craws in my mind.

This was a recession proof law practice. When loan volumes slowed down, foreclosures went up so the firm got to handle the inevitable foreclosures months or years later when the borrowers couldn't "roll over" their loans anymore.

The only way the borrowers ever "won" against the finance company was when they filed for bankruptcy, as many did. But that's no longer feasible in most cases.

Needless to say, after less than two years of being a dedicated employeee, I had all I could stand and quit -just walked out the door and said I'd had enough, much to the chagrin of my boss.

This crisis is different. Many of those former Republican McMansioneers have similar loans these days. Sub-Prime doesn't necessarily mean Mr. and Mrs. Joe Sixpack. It includes Mr. and Mrs. John Cognac and their son, Rush Cigar Cognac. And their shining house on a hill.

This thing is going to get bad -worse than anything we've seen in years. But then I've been fussing about adjustable rate mortgages here in comments for several years. The kind Alan Greenspleen was recommending just a few short years ago.

Keep up the good work Chris Dodd. But Mr. Dodd, you don't go far enough. Roosevelt let the government make loans to help bail out homeowners when the foreclosure reaper was at their door. We could do that too. At least it would be worth a try to win over your colleauges to the idea.

Sub-prime has also historically meant "black or Latino." Study after study has shown that members of typically redlined ethnic groups are steered or pushed into high-interest subprime loans more often than whites with identical or worse credit profiles.

Which means that HUD's institutional rhapsodies about "promoting minority homeownership," while appearing to reduce race-based injustice, may actually have increased it.

More or less at random, see this from HUD's research department in 2003:
www.huduser.org/periodicals/urm/urm_04_2003/urm1.html