Even as thousands of people were losing their homes in the subprime mortgage lending mess that many economists say set off instability in the US and world financial markets, the mortgage lending industry spent generously in Washington on federal lobbying and campaign contributions and fended off attempts at regulation and oversight, a Common Cause study shows.
The report shows that even as record numbers of people began home foreclosure proceedings after receiving mortgages they could not afford, the mortgage lending industry spent nearly $32 million in 2007 lobbying the federal government and donating to Members of Congress and the national political parties. That came on the heels of $187 million the industry spent lobbying in Washington from 1999 to 2006, and likely contributed to Congress’ hands off approach to oversight or regulation, even as consumer advocates predicted problems with subprime lending.
While campaign donations favored Republicans prior to 2007, mortgage industry donations moved toward Democrats once they took control in 2006. The industry contributed $1.23 million to Democrats and $1.21 million to Republicans from January to June 2007.
