2010 was an ugly year when it came to foreclosures and the housing market. More than one million homes were foreclosed upon, loads of homeowners were booted from federal foreclosure prevention programs without receiving a sustainable loan modification, and it came to light that mortgage companies were, through the use of “robo-signers,” short-circuiting the legal process for finalizing a foreclosure. Just this week, JP Morgan Chase was forced to pay out $2 million after realizing that it had improperly overcharged and foreclosed upon military families.

At this point, it seems that the housing market is going to be a drag on the economy for a very long time. But it didn’t have to be this way. As the Center for American Progress has argued time and again, real help for troubled homeowners would have been beneficial not only to those individual families, but to the wider economy. However, foreclosure prevention efforts have been hampered by mortgage servicers (like Bank of America, Wells Fargo, and CitiMortgage) dragging their feet, fighting against common-sense proposals to help homeowners, and then employing review processes (like those used by the robo-signers) biased in favor of foreclosure.

In a fiery speech today, Federal Deposit Insurance Corp. Chair Sheila Bair took mortgage servicers to task for their inability to help troubled borrowers, outright blaming them for the housing market’s continued woes:

Throughout the mortgage crisis, from the earliest days of the subprime credit problem to the current robo-signing controversy, the most persistent adversary has been inertia in the servicing and foreclosure practices applied to problem loans. Prompt action to modify unaffordable subprime loans in 2007 could have helped to limit the crisis in its early stages. Instead, we saw one and a half million foreclosures that year, contributing to a decline in average home prices that eventually totaled about one-third. Mortgage servicers have remained behind the curve as the problem has evolved to include underwater mortgages and, now, foreclosure practices that sow confusion and fear on the part of homeowners and fail to fully conform to state and local legal requirements.

“The bottom line is that we need more modifications and fewer foreclosures,” Bair said.

Yesterday, Sen. Jeff Merkley (D-OR) introduced a foreclosure prevention plan with some excellent ideas in it, including ending the “dual track” practice of foreclosing on a homeowner who is under review for a modification and allowing bankruptcy judges to modify primary mortgages (which is a provision that has come up time and again in Congress, only to get defeated each time by the banking industry).

The Securities and Exchange Commission — which, among other things, is tasked with policing the country’s financial markets — has been forced to cut back on some of its enforcement activities due to a budget impasse in Congress. The continuing resolution passed in March did not include new funding for the SEC to implement the Dodd-Frank financial reform law or to ramp up enforcement activities of money managers partially designed as a response to the Bernie Madoff ponzi scheme scandal.

The SEC has already curtailed investigations, allowed complaints from investors to go unaddressed, and even left important positions unfilled. As the Financial Times reported, “The [SEC's] New York office, a hub with oversight of hedge fund managers and Wall Street firms, has been operating without a head of information technology.” And it looks like the Republican majority in the House is disinclined to rectify the SEC’s funding situation any time soon:

Scott Garrett, a Republican from New Jersey who chairs the subcommittee overseeing the SEC and also sits on the budget committee, said that he was not in favour of granting the regulator the big budget increase that it — and leading Democrats — say is necessary to fulfil its expanded duties and to invest in extra staff and on new technology. “We’re going to say the federal budget is under a time of constraint … so everybody is being asked to cut back,” he told the Financial Times. “The whole House has been asked to cut back by 5 per cent.”

This is the sort of budget prioritizing that fits nicely with conservative ideology, but doesn’t work in practice if that budget cut Garret envisions results in the next big financial scam being missed by regulators. And the GOP, by preventing the SEC from expanding its enforcement division, is simply doing the bidding of some of its biggest patrons. As the Center for Public Integrity and NBC jointly found, “a small network of hedge fund executives pumped at least $10 million into Republican campaign committees and allied groups before November’s elections.” And look who’s leading the pack:

As it became increasingly clear late last summer that Republicans were likely to capture the House, the partners at Elliott Management Corp., a $17 billion Wall Street hedge fund that specializes in distressed foreign debt, mobilized to boost Garrett’s political fortunes…Elliott executives — one of whom wrote a check for $35,000 — ended up providing about 96 percent of all the funds raised by the Garrett committee, according to the review of campaign records by CPI and NBC.

Garrett and his fellow Republicans on the House Financial Services Committee were already inclined toward carrying Wall Street’s water and throwing sticks into the SEC’s spokes, but these last-minute checks from some of the Street’s big players likely added to that resolve.

Last week, during his “State of American Business” address, Chamber of Commerce President Tom Donohue decried the Dodd-Frank financial reform law as a “regulatory tsunami.” Donohue said that the Chamber is “particularly concerned” with the new Consumer Financial Protection Bureau — which the Chamber dishonestly fought against during the Dodd-Frank debate — and added that the Chamber would be “deeply involved in the regulatory rulemaking” moving forward.

The Chamber, of course, was at the forefront of the fight against Dodd-Frank, coordinating a campaign with the nation’s biggest banks to blunt the much-needed regulatory overhaul. And it seems that Donohue is preparing the Chamber to do much more than simply weigh in on the Dodd-Frank rule-writing process. In an address before 200 business executives in Minneapolis yesterday, Donohue pledged to “starve to death financially” new regulatory agencies:

He decried a “regulatory tsunami” that is “keeping your children out of work, that’s putting your father out of work.” He called for the repeal of health care reform, said the Dodd-Frank financial reform legislation vastly overreached, and described the consumer protection agency created by that legislation as, “the most intrusive you’ve ever seen anywhere.” He pledged to work with Congress to “starve to death financially” new regulatory agencies and rule-writing efforts.

This is a pretty clear declaration that the Chamber will push Republicans to complete their drive to defund the Consumer Protection Bureau, subjecting it to the congressional appropriations process and thereby deny it the money it needs to get off the ground. Donohue also seems to want to deny funding to the other federal regulatory agencies involved in implementing Dodd-Frank.

Already, a lack of funding has caused both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to delay implementation of some provisions of the law. “It’s what Republicans have done, historically, to regulatory bodies,” said former Sen. Chris Dodd (D-CT). “It’s harder to accuse someone of wanting to deregulate when they just starve the budget of an agency than it is for them when they actually try to get rid of it.” And it seems like the Chamber, since it failed to prevent the passage of Dodd-Frank, is hopping aboard.

Cross-posted on The Wonk Room.

Last week, during his “State of American Business” address, Chamber of Commerce President Tom Donohue decried the Dodd-Frank financial reform law as a “regulatory tsunami.” Donohue said that the Chamber is “particularly concerned” with the new Consumer Financial Protection Bureau — which the Chamber dishonestly fought against during the Dodd-Frank debate — and added that the Chamber would be “deeply involved in the regulatory rulemaking” moving forward.

The Chamber, of course, was at the forefront of the fight against Dodd-Frank, coordinating a campaign with the nation’s biggest banks to blunt the much-needed regulatory overhaul. And it seems that Donohue is preparing the Chamber to do much more than simply weigh in on the Dodd-Frank rule-writing process. In an address before 200 business executives in Minneapolis yesterday, Donohue pledged to “starve to death financially” new regulatory agencies:

He decried a “regulatory tsunami” that is “keeping your children out of work, that’s putting your father out of work.” He called for the repeal of health care reform, said the Dodd-Frank financial reform legislation vastly overreached, and described the consumer protection agency created by that legislation as, “the most intrusive you’ve ever seen anywhere.” He pledged to work with Congress to “starve to death financially” new regulatory agencies and rule-writing efforts.

This is a pretty clear declaration that the Chamber will push Republicans to complete their drive to defund the Consumer Protection Bureau, subjecting it to the congressional appropriations process and thereby deny it the money it needs to get off the ground. Donohue also seems to want to deny funding to the other federal regulatory agencies involved in implementing Dodd-Frank.

Already, a lack of funding has caused both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to delay implementation of some provisions of the law. As Reuters reported, “the delay could give a reprieve to big Wall Street players ranging from Goldman Sachs to BlackRock who, through their lobby groups, have been pressing regulators to slow their furious pace to impose a new rule book on the financial sector called for by the reform law.”

“It’s what Republicans have done, historically, to regulatory bodies,” said former Sen. Chris Dodd (D-CT). “It’s harder to accuse someone of wanting to deregulate when they just starve the budget of an agency than it is for them when they actually try to get rid of it.” And it seems like the Chamber, since it failed to prevent the passage of Dodd-Frank, is hopping aboard.