You’ve heard the commercials. “Want to own your own home, want to buy a car? Bad Credit? No Credit? No problem!” The past decade has seen the immense growth of “subprime” loans made to millions of people with bad credit histories.
Mortgage loan companies and banks have made hundred of billions of dollars in profit by preying on people who would otherwise be shut out of the market. These days, it’s hard to even pay for basic necessities without going into debt, as stagnating wages fail to keep pace with the fast-rising cost of living.
In the first quarter of 2007 almost 19 percent of all subprime loans, or 1.1 million mortgages, were either delinquent by more than 30 days or in foreclosure, an increase from 16.4 percent six months earlier (Mortgage Bankers Association, 6/14/07). Dozens of companies have either quit the subprime business or gone bankrupt.
Defending ourselves against these [capitalist] attacks will take a broad mobilization of the affected working-class communities. Working-class homeowners need to organize community committees to demand an end to foreclosures and zero tolerance to throwing families out of their homes. We need to demand state and federal funding for debt relief and fight for the cancellation of debts with no payment to the super-rich predatory lenders.
In the long term, however, it’s important to see the subprime lending crisis as just one expression of what big business can get away with in the absence of a strong working-class movement. Our economy is controlled by a tiny elite that glibly chases profits without the slightest regard to the livelihoods it destroys. It’s more urgent than ever to build a mass movement that consciously aims to replace the rule of profit with a rational, democratically-planned, socialist economy.
Predatory Lending: Cheating Workers Out of House and Home
Thursday, August 09, 2007
Predatory Lending: Subprime Pt I
Excerpts from an article in Justice newspaper by Theodros Shibabaw: