Kirstin joined the Washington Post as a business reporter in 1988, and began writing about the country’s economic highs and lows and the role played by government regulation.
She was one of the first in the nation to spot the dangers in the mortgage market. In May 2005, she wrote a story about a disturbing new trend, risky loans originally designed for wealthy Californians that were being pushed by loosely-regulated lenders on unwary borrowers and real estate speculators. They were sweeping like a contagious disease into the real estate market.
May 28, 2005: "Many Buyers Opt For Risky Mortgages"
June 3, 2005: "Market Driving Risky Mortgages"
June 4, 2005:"Buried in Choices: Buying a Home Burdens People With Elaborate Variety of Options"
In 2005 and 2006, Kirstin wrote 32 stories about the troubling new kinds of loans, which were being aggressively pushed by mortgage brokers, taking her questions to the government agencies responsible for protecting borrowers and ensuring the financial soundness of lenders.
Many lenders sold off the loans in securitized packages and shrugged off their responsibility to investors or borrowers. Kirstin asked probing questions about the dangerous trend to the US Department of Housing and Urban Development, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Justice Department and Fannie Mae.
In the same way federal officials watched Hurricane Katrina develop off the coast without taking steps to prepare, federal banking-industry regulators talked but did too little, too late. The banking industry lobbied hard against additional regulation; the ratings agencies failed to sound a warning. The attorneys general in some states tried to protect consumers in their own states, but federal regulators instead took action to prevent them from doing so.
A sampling of the stories:
June 10, 2005: co-written with Nell Henderson, "Greenspan Wary of Risky Mortgages: Price Peaks Built on 'Exotic' Loans Trouble Fed Chairman"
June 16, 2005: "Banks, Realtors Take Turf War to Congress"
June 17, 2005: “Regulators May Warn About New Mortgage Products; Guidance Would Address Use of High-Risk Loans”
July 29, 2005: "Bush Picks Ameriquest Owner as Ambassador: Firm's Lending Tactics Investigated"
Nov. 11, 2006: "Case Tests Federal Supremacy Over Banks: Supreme Court to Hear Arguments Next Week in States' Challenge to Preemption of Regulation"
Dec. 14, 2006: "High-Cost Mortgages Putting Many Homeowners at Risk"
The crash began in 2007; some people had been targeted most aggressively for the bad loans and began losing their homes first:
March 17, 2007: “High-Cost Home Loans More Common in Prince George’s County: Disparity Seen With Majority-White Areas”
March 26, 2007: “Foreclosure Wave Bears Down on Immigrants”
Then the problem spread everywhere:
June 30, 2007: "Area Suburbs See Rise in Foreclosures"
Kirstin's last story as a staff writer at the Washington Post, before leaving to finish her book:
June 1, 2008: "Va. to Offer Mortgage Clinics For Homeowners in Jeopardy"
It was not the first time Kirstin had written about a real estate crash. Loose lending regulations on the state and federal level fueled a boom in the real estate market in the 1980s, which crashed in the early 1990s, in what came to be known as the savings and loan bailout. Kirstin described the early euphoria and raised questions:
Sept. 13, 1988: “Construction of Retail Space Accelerates; Intensity of Building Surge in Area Called ‘Unbelievable,’ ‘Risky’”
December 17, 1988: “Affluent Using More Home Equity Loans; Survey Examines How Americans Utilize the Tax-Deductible Financing”
August 9, 1990: “Troubled Loans Rise For Bank Survey D.C. Region Shows Vulnerability”
The market grew shakier:
November 7, 1988: “For Sale: Lots of Mansions; Million-Dollar Homes Fill Washington Market”
July 20, 1990: “Median Home Price Falls: First Drop in 10 Years”
And when it collapsed:
March 19, 1989: “The Foreclosure Flood; Massive Holdings a Major Challenge to Federal Agencies”
July 9, 1992: “Area Developers Face More Trouble; Second Wave of Foreclosures Expected as ‘Bullet Loans’ Come Due”
Kirstin described how the government was left holding the bag:
February 17, 1991: “Unfinished Resort Sits in Legal Limbo; Financed Mainly by Failed Thrifts, Would-Be Florida Playground Now a Debt to Taxpayers”
October 23, 1991: “Bank Failures Make U.S. an Area Real Estate Titan”
Kirstin’s 1990 series on how government loans were abused to destroy DC neighborhoods was a finalist for the Livingston award for outstanding young journalist.
September 2, 1990: “The Real Price of Housing Fraud; As Speculators Turned Quick Profits, Longtime Tenants Lost Their Homes, Series: THE MANIPULATORS; HOW FRAUD DESPOILED A NEIGHBORHOOD, Series Number: 1/3”
September 2, 1990: “Anatomy of a Real Estate Scheme; Dealers Illegally Obtained Government-Backed Loans, Evaded D.C. Rent Control Law”
Monday, September 3, 1990, page A1: “The Euphoria of Easy Money; Many Drawn into Fraud”
September 3, 1990: “HUD, District Blame Each Other for Not Detecting Rent Control Abuse”
September 4, 1990: “Following the Twisting Trail of Fraud Series: THE MANIPULATORS; UNRAVELING THEIR HOUSING SCHEMES, Series Number 3/3”
Kirstin wrote many stories about the changing American economy and its effects on workers:
March 31, 1996: “For Workers ‘Surplused’ by IBM, Lives Forever Changed”
July 1, 1993: “Dark Clouds, Silver Linings Over the Trail to Mexico; Enthusiasm Is High at Real Estate Session"
Sept. 6, 1999: “The Time of Their Lives: Seniors Hit the Road, Looking for the Right Job”
April 13, 2003: “The Pension Chasm: Disparity Between CEOs, Workers Under Scrutiny”
March 20, 1999: “The World Comes to the American Workplace: Tight Labor Market and a Surge in Immigration Brings New Diversity”
Kirstin chronicled a surge of discrimination lawsuits, with workers bringing claims of discrimination based on age, disability, race, ethnicity or gender. One set of stories emerged when the US Equal Employment Opportunity Commission sued Mitsubishi Motor Manufacturing Company of America, and charged that the company had permitted a pervasive pattern of sexual harassment at its auto plant in Normal, Ill.
Kirstin began investigating the claims in the case, and wrote a series of stories on the landmark case. Then she heard about an obscure legal case in Minnesota that might have important national ramifications. She went to a small town in Eveleth, near the Canadian border, to learn what had happened at an isolated mine, and wrote a path-breaking series on the 10 years of litigation:
October 27, 1996: “Into an Abyss of Sex Harassment at Eveleth Mine Series: A HOSTILE WORKPLACE Series Number: 1/2”
October 28, 1996: “Judge put Small Price on Pain; Damage Award Paled by Litigation Norms”
October 28, 1996: “In Court, Women Miners Felt Harassed Again Series: A HOSTILE WORKPLACE Series Number: 2/2”
Kirstin wrote more than a half-dozen follow-up stories. The mine finally settled the women’s lawsuit in January 1999, more than 12 years after it began.
Jan. 5, 1999: “Long Sex-Bias Case Ends; Minn. Mining Firm Settles Lawsuit”
The fictionalized movie North Country, based on the lawsuit, was released in 2005, based on a 2002 book called Class Action, written by Clara Bingham and Laura Leedy Gansler.
In 2008, Kirstin shared in the Pulitzer Prize awarded to the Washington Post staff for coverage of the campus slayings at Virginia Tech; she profiled two heroic professors--Liviu Librescu and Kevin Granata--who died protecting the lives of their students. She left the Washington Post last year to focus on finishing her biography of Frances Perkins, “The Woman Behind the New Deal: The Life of Frances Perkins, FDR’s Secretary of Labor and His Moral Conscience,” published by Nan A. Talese/Doubleday.
Copyright Kirstin Downey. All rights reserved.