More than 2,000 nationwide progressive bloggers, activists and policymakers have descended on Austin, Texas, this week for the phenomenal Netroots Nation conference. I am one of those folks.

One of the most interesting discussions so far has been “The Subprime Mortgage Crisis: Inside an American Tragedy.” Some of the nation’s leading thinkers and advocates on housing and economic issues came together to talk about how we can take some of the toxicity out of the broad debate over the subprime crisis. The experts — Mark Winston Griffith of the Drum Major Institute, Rep. Brad Miller (D-NC), Mike Hudson of the Center for Responsible Lending, and Hale Stewart of the indispensable economics blog Bonddad — all argued that the subprime crisis is increasingly viewed in the media as a problem caused by unscrupulous buyers. Instead, they said, the crisis was primarily caused by a failure or government regulation and a lending sector that had become completely disconnected from the consequences of failed loans.

“There has been a huge abdication of responsibility on the part of Congress in this crisis,” Griffith argued.

The panel listed in devastating detail all the ways that new loan products were created, marketed and sold to unsuspecting borrowers. In fact, many of the loans were DESIGNED TO FAIL, so as to force borrowers to come back to the in search of a new loan to cover costs. During times of increasing housing prices, these loan defaults simply brought lenders a flood of new financing fees and, basically, the value the home added between the original loan and the new one.

“They were parasitic loans,” said Miller, who sits on the House Financial Services Committee. “They were designed to take advantage of people and take away their life savings.”

The panel represented what appears to be a concerted effort on the part of Netroots Nation (formerly YearlyKos) to deal with policy issues, rather than merely political ones. The level of thought and policy innovation at this conference is among the best I’ve ever seen at a non-wonk event. I’d highly suggest checking it out next year. And I’ll try to post more from my time in Austin as the weekend rolls on.

Tags: affordable housing, center for responsible lending, drum major institute, housing, mortgage, mortgage crisis, netroots nation, subprime

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