Debate without Representation: How Borrowers have been Neglected in the Subprime Mortgage Conversation

It is no novel realization that freedom of speech does not include a right to be heard by the government. Those in government will only hear those who can hurt it or help it: terrorists and moneyed interests. People without malice and money have virtually no representation apart from the occasional benevolent politician who champions their causes—occasionally. Some human rights movements have gained traction by appealing to the civil rights and liberties this country champions. However, oppression excluding the lower classes from opportunities for upward social mobility does not get such traction.

However, in the wake of the global financial crisis, a sector of society used its free speech in Occupy Wall Street protests, documentaries about foreclosures, and “town halls” held by local, state and federal politicians, and demanded an end the exploitation resulting from the financial disparity between borrowers and lenders. This sector reached such a critical mass, that the federal government had to—at least appear to—crack down on the moneyed interests they usually cater to.

The “critical mass” sparked the debate on mortgage reform, but among whom? The debate is between the government and the moneyed interests. Who is representing those on whose behalf this debate is supposedly being conducted? The benevolent politicians? A common thread woven throughout the literature on how to guard against “subprime” mortgages suggests not.

This common thread is a call for a rise in down payments. This call is problematic for several reasons. However, most disturbing, is the fact that this “solution” for ending subprime mortgages would result in less home ownership—an important investment for upward social mobility—among those on whose behalf this debate is supposedly being conducted: the people who lost their homes in the subprime mortgage crisis and whose upward social mobility has been stifled, in part, through lack of access to safe credit and safe investment.

Again, the government not listening to the voices of non-moneyed interests is not a new phenomenon. However, this is a harshly lit example, given (1) the government claims it is responding to the concerns of those who do not constitute moneyed interests, and (2) the concerns derive from the fact that these non-moneyed interests have no power parity with the moneyed interests. More broadly, it is a much more direct example of how the civil liberties this country cherishes—such as freedom of speech—are far less potent when not coupled with the economic and social rights this country largely eschews.