In an op-ed published in Financial Times on Wednesday, Sen. Barack Obama, D-Ill., laid out his plan to combat subprime mortgage problems and listed those he felt were responsible for the crisis.

Sen. Obama called the mortgage rules outdated and said Congress needed to pass updated regulatory and disclosure laws. He proposed the creation of a fund to help borrowers refinance or sell their homes and a standardized metric to allow borrowers to compare mortgage products.

Assistance to borrowers would be funded by penalties on lenders that acted irresponsibly or committed fraud, he said. The presidential candidate has introduced a bill that would increase penalties for mortgage fraud, set aside funding for law enforcement agencies to combat such abuses, and create a database of fraudulent lenders.

Sen. Obama rejected a bailout for lenders, which he blamed, along with lobbyists and borrowers, for allowing problems to occur in the subprime market.

"We also have to recognise what will happen if we reward the mortgage industry's lobbying: They will keep using the same kinds of deceptive practices to make a quick buck, no matter what the consequences to homebuyers and their communities," he wrote. "Rather than correct what they are doing wrong, these companies will know that if things go badly, they can always lobby Washington to let them off the hook."

Sen. Obama also blamed the government for what he called lax oversight of lenders.

"We also know that Washington played a role," he wrote. "At a time when nonbank lenders were offering new kinds of mortgages, the federal government should have made sure it was all being done on the level. Instead, our government failed to provide the regulatory scrutiny that could have prevented this crisis."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.