I warned about an economic crash years before the 2008 crisis, but the people in power wouldn’t listen. Now I’m seeing serious warning signs in the economy again — and I’m calling on regulators and Congress to act before another crisis costs America’s families their homes, jobs, and savings.
I’ve spent most of my career getting to the bottom of what’s happening to working families in America. And when I saw the seeds of the 2008 crisis growing, I rang the alarm as loud as I could.
In 2003, I called out subprime lenders for tricking unsuspecting families — especially families of color — into refinancing into overpriced subprime mortgages. In 2004 and 2005, I warned that families were getting deeper into debt and hanging on only by borrowing against their homes, which put them in a vulnerable position if costs rose or a family member lost a job. In 2006, I flagged that foreclosure rates were starting to go up, but that the mortgage lenders were still churning out loans because they had passed on the risk of defaults to investors in the form of mortgage-backed securities. Those trends — shady subprime lending, rising household debt, a mortgage market where lenders didn’t bear the risk of their loans — set the stage for the 2008 crisis. [Continue reading…]