In a discussion concerning the over criminalization of corporate crimes at the Heritage Foundation, Former Attorney General Dick Thornburgh said the justice system should be “reserving criminal sanctions” for the worst violators of corporate crimes. He added that only prosecuting severe offenses is advantageous to an influx of “flimsy prosecutions” due to a “shortage of resources” to carry out an excess amount of criminal investigations.

Thornburgh stated that in the current economic climate, there is a “temptation to do something” among citizens, lawyers, and lawmakers alike. He advocated a “cooling off period” before action is taken.

William McLucas, Former Director of Enforcement at the Securities and Exchange Commission said it is difficult to be unbiased “against the backdrop” of “executive compensation.” He thought the American
economy had suffered “systemic failure” and that the U.S. should “not get distracted” from the problems in our economy by assessing biased blame.

Director of the Center for Data Analysis at the Heritage Foundation William Beach blamed our housing crisis on the desire to “increase home ownership” for people who were “not ready for those mortgages.”

He said that until the risk of home sales is reduced “we are by no means out of the crisis.”

Barry Pollack, Director of the National Association of Criminal Defense Lawyers, felt the economic crisis created a “presumption of guilt” among corporate crimes. He added that criminal prosecutions are “viewed with 20/20 hindsight” which isn’t fair to those charged since this corporate conduct has been allowed for years. He said a reduced amount of corporate prosecutions “does not mean you’re giving up the notion of accountability.”

Former U.S. Comptroller General under Presidents Bill Clinton and George W. Bush David M. Walker said the U.S. needs to “get our financial house in order.”

Talking about the bailout package, Walker said the government gave the Treasury Department $700 billion not for what they knew, but “for what they didn’t know.” Walker added that American citizens were not initially okay with the bailout package because it “overreached and under-communicated.” He said the American people were not given reason as to why this was being done.

Reacting to the presidential candidates’ economic proposals, Walker said both candidates would make the national debt worse. He said both would do “zip” in digging the U.S. out of its current fiscal hole.

Walker said it is possible that the subprime loan crisis could spread to the government. He warned that if it did, “No one’s going to bail out America.” To avoid this possibility, he recommended the next president create a “credible, capable, bipartisan fiscal commission.”

Bush Economic Adviser Keith Hennessey said an “oversupply of houses” has contributed to the significant downturn in housing markets. He said that as long as there is an oversupply, a downturn will continue.

At a summit on housing, Hennessey said that mortgages have been “sliced and diced.” Hennessey said these bad mortgages have contributed to “downside risk” in the economy, which has culminated recently in the bailout bill by Congress.

Federal Housing Administration (FHA) Commissioner Brian Montgomery said the FHA’s goal for homeowners is “sustained ownership.” He said the goal is not to give homes to those who financially cannot handle the costs. He called the subprime loan crisis “fool’s gold” for its low initial costs followed by higher costs later.

Montgomery, who also is Assistant Secretary of Housing of the U.S. Department of Housing and Urban Development (HUD), said the goals of HUD are to “try and save the hundreds of thousands in foreclosure,” and to maker sure the current housing crisis “never happens again.”

HUD Director of Single Family Program Development Meg Burns talked about two programs recently enacted designed to help homeowners. She said both the “Housing and Economic Recovery Act of 2008″ and the “Hope for Homeowners” rollout are designed to create fair payments for both borrowers and lenders. She said one difference between the two is that the Housing and Recovery Act is designed to help those “in a state of delinquency” due to job loss or medical problems, while Hope for Homeowners is for those “who should never have become homeowners in the first place.”

Burns’s advice to all homeowners who are having financial difficulties is to “call your lender.”

At a Domestic Policy Subcommittee of the House Oversight and Government Reform Committee hearing on the impact of the subprime mortgage crisis on neighborhoods, Chairman Dennis Kucinich (D-Ohio) says that while “the meltdown of subprime lending has been a genuine tragedy” for individuals, the “totally blameless victims” are the neighborhoods affected by vacant and abandoned property.  Kucinich lists the repercussions of abandoned properties, including falling property value, loss of rental units, rise in crime, and loss in tax revenue. (1:00)

 

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At a Domestic Policy Subcommittee of the House Oversight and Government Reform Committee hearing on the impact of the subprime mortgage crisis on neighborhoods, Maryland Councilmember Nancy Floreen says that foreclosed property “sends a message” to the rest of the community that they “don’t need to try,” and that if they’re “on the edge, why not do it to?”  She said it causes others in surrounding homes to wonder why they should improve the “quality of life within a community” by cleaning up graffiti, mowing lawns, repairing broken steps, and other maintenance issues. (0:50)

 

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At a Domestic Policy Subcommittee of the House Oversight and Government Reform Committee hearing on the impact of the subprime mortgage crisis on neighborhoods, Maryland Councilmember Nancy Floreen says that the market has “preyed upon people who cannot afford the situations in which they’ve been led.”  She also says that the crisis has disproportionately affected minority communities, and said that blacks in Maryland are three times more likely than whites to receive a subprime loan, and Latinos are twice as likely as whites. (0:36)

 

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