Senate Dems argue over financial crisis - 13 WTHR Indianapolis

Senate Dems argue over financial crisis

Tom Walker/Eyewitness News

Washington, DC - Democrats at a Senate Banking Committee hearing Thursday took turns blaming the financial meltdown on years of money-hungry investment firms on Wall Street getting away with risky ventures while government regulators looked the other way and people enticed into mortgages they couldn't afford, lost their homes.

"Literally thousands and thousands of people ended up with mortgages vastly more expensive than ones they qualified for. That is criminal in my view," said Sen. Chris Dodd (D-CT).

A panel of former regulators and reform advocates agreed one thing missing in the current crisis is some way to punish those who caused it.

"I don't know anything worse than stealing somebody's house and ruining somebody's neighborhood, ruining an economy," said Eric Stein, Center for Responsible Lending.

The Ohio plumber who became an instant celebrity when his complaint about taxes in opening his own business was a point of argument in the presidential debate could just as easily be a victim of the credit crisis, said one Democrat.

"When the regulators have simply been asleep on the job, or been co-opted by Wall Street and some banks, makes it way too difficult," said Sen. Sherrod Brown (D-OH).

As for what to do now, senators were told buying up troubled mortgages would cost billions the government would never get back because home values have plummeted.

"Many of them are empty, they've been gutted, they're in communities where there are a lot of additional properties that are empty as a result of this foreclosure crisis," said James Rokakis, county treasurer.

One thing seems sure: lots more government regulation of financial markets. Massive changes are being called for here, especially when it comes to protecting the consumer.

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