Back in July and early August we said lawsuits would begin after the subprime mess was sorted out. Given time for analysis, and after the shock and awe (or denial) lawsuits always follow. Now it’s time to see if elected officials in the United States cave to lobbying efforts or remember the people who elected them in the first place. History tells us, with Ohio’s Bob Ney and others, that some elected officials will soon forget how they got to Washington in the first place.
House Democrats introduced legislation on Monday that would for the first time let homeowners sue Wall Street firms for relief from mortgages that the borrowers never had a realistic chance of repaying. The measure, which is expected to generate intense opposition from the financial services industry, addresses some of the problems tied to the transformation of the mortgage lending industry from an often local business into a trillion-dollar global market for investors in search of higher returns.