Fed Faulted For Inaction On Mortgages - washingtonpost.com
On the foreclosure and subprime lender front, Nancy Levy sent this report on Democratic Senators grandstanding on the issue. I realize there is a problem here, but blaming the federal reserve for the actions of subprime lenders strikes me as a major stretch. To me, this is just Sen. Christoper Dodd (D-Mass), et al., woofing and barking at Alan Greenspan to get their names in the paper. But maybe I'll be proven wrong by the Democrats miraculously solving the problem of people borrowing too much money on risky terms to buy more house than they can afford.

Senators yesterday accused the Federal Reserve and its former chairman, Alan Greenspan, of a "pattern of neglect" that fostered a crisis in the mortgage industry that is putting more than 2 million families at risk of losing their homes. Members of the Senate Banking Committee said the Fed had power to regulate risky lending practices but did not choose to use it even as exotic mortgages given to buyers with checkered credit helped drive up housing prices across the country. The mortgage mess has rattled markets in recent weeks and spurred a broad reassessment of lending practices.