How Congress helped create the subprime mess!

January 31 2008 CNN.Money.com Executives in Houston high-rises can rest easy. The mortgage industry has officially replaced Big Oil as Washington's favorite political punching bag. But before our elected officials in Congress get too preachy about the lousy lending practices that led to today's mortgage mess, first they ought to consider Congress's own role in laying the groundwork. The fact is, neither the expansion of the subprime market nor the proliferation of exotic interest-only or option-ARM mortgages would have been possible without federal laws passed in the 1980s. Lawmakers may say they are outraged, but it was actually two key pieces of legislation that primed the pump for the housing implosion: the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternative Mortgage Transactions Parity Act of 1982 (AMTPA).

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