Crisis Rooted in Economic Insecurity

In the past two weeks, we have been reminded of the seriousness of the mortgage foreclosure crisis. Major mortgage lenders such as Fannie Mae, Freddie Mac and Wells Fargo all have been forced to write off billions of dollars in losses as a result of their investments in subprime mortgages. The impact of the mortgage foreclosure crisis extends far beyond Wall Street. Housing foreclosures are changing the landscapes of our neighborhoods and causing a credit crunch, hence making loans to all consumers more expensive. In Hennepin County, Minn. (an area I represent), less than six years ago there were about 1,000 home foreclosures, but in 2006 there were more than 3,000. As Congress begins to address the mortgage foreclosure crisis, we need a comprehensive strategy that in the short term curbs the abuses in the subprime lending industry and in the long term addresses the root cause of the foreclosure crisis, which I believe is rooted in the economic insecurity of America’s working families.