With the housing crisis leading our economy into a swoon, it has been an ugly year for U.S. homeowners and an unfortunate introduction into the practices of mortgage lenders like Countrywide Financial, the poster child for pushing "subprime" loans that have ultimately put over a million homes at risk of foreclosure.

We documented how the mortgage lending industry appeared to buy off Congress with $210 million in lobbying and campaign contributions, leading to inaction on the subprime lending situation until it became a crisis too big to ignore.

Things appear even sleazier today after Portfolio.com investigated Countrywide and found that at least two U.S. Senators received favorable loan deals, worth several thousand dollars if not tens of thousands, as yet another example of how the industry curried favor with leaders in Congress.

It appears that the National Association of Home Builders, which made headlines in February for refusing to give any more campaign contributions because, NAHB whined, Congress wasn't giving them what they wanted, has now gone back to making campaign contributions.

It says something that the other powerful interest groups are upset at NAHB for making it so obvious that they expect favors when they give campaign contributions.

I, for one, am just relieved that BUILD-PAC -- a lobbying group with over $2 million in the bank and "one of the biggest corporate donors to campaigns" -- had finally had its voice heard.  Thank goodness.  Back to business as usual, ahem.

(hat tip TPM)

Yesterday, Senate Banking, Housing and Urban Affairs unveiled its bipartisan Foreclosure Prevention Act. While it includes some generous tax breaks and credits for home builders, who will be able to write off in 2008 and 2009 major losses going back four years, it does not contain a bankruptcy provision aimed at helping homeowners in foreclosure. The bankruptcy provision would have empowered bankruptcy judges to reduce mortgage interest and principal for struggling homeowners.

Democrats have said they will offer the bankruptcy measure as an amendment, but it probably won't pass because it is seen as a "bailout" by Republicans.

Home builders, btw, gave $10,414,568 in campaign contributions in the 2004 election cycle, 78 percent to Republicans, according to Center for Responsive Politics. They gave $9,165,700 in 2006 cycle (76 percent to Rs) and $4,940,220 so far in 2008 cycle (64 percent to Rs).

Mortgage companies are also big fans of the new bill, whose contributions total $7,814,104 in 2004 cycle, $6,887,354 in 2006, and $3,372,789 so far in 2008 cycle.

You could say these guys are partly to blame for the whole sub-prime lending crisis, since they are the ones who helped drive it. They also made tons of profits in the process - obviously why they kept lending and building even in the face of obvious market distortions.

I wonder if they have learned their lesson? I am sure the countless families that wanted to own a home certainly have learned their lesson because Congress won't bail them out now. Democracy in action.

When we released our first report in May about how much money subprime mortgage interests spent on lobbying and campaign contributions to fight consumer protections in Congress from 1999 to 2006, the word "subprime" was just starting to find its way in newspaper headlines. Since then, the media has been saturated with stories of how foreclosure rates continue to reach record levels, how investment firms from here to China that have holdings in the subprime market are getting burned, and how the effects of the subprime meltdown are leaking into other sectors of the economy. So we thought now would be a good time to revisit the issue.

We analyzed newly available data for the same top subprime lenders and trade associations from the first report to see what they've been doing. Here's what we found: despite facing serious financial struggles since the mortgage collapse, the biggest subprime lenders have spent $32 million in the first half of 2007 on lobbying and campaign donations to fight overwhelming public pressure on Congress to enact reforms for the subprime market.

To read the report, click here.