JUAN GONZÁLEZ: Well, 12 Democratic presidential hopefuls will spar this evening at Otterbein University in Westerville, Ohio, during the fourth official Democratic primary debate. As voters weigh their options, one of the pressing issues on many Americans’ minds is housing.
Independent Senator Bernie Sanders of Vermont is the latest 2020 Democratic presidential candidate to release a comprehensive “Housing for All” plan. He has advocated for rent control, called for big investments in affordable and in subsidized housing, and has also pushed for reforms in zoning laws to allow construction in more expensive neighborhoods.
Meanwhile, Massachusetts Senator Elizabeth Warren introduced the American Housing and Economic Mobility Act last year, which is the basis of her proposed affordable housing plan, calling for expanding fair housing legislation, building or rehabilitating millions of low- and middle-income housing units and reforming zoning laws.
Several other candidates, including Senators Cory Booker and Kamala Harris, have released detailed plans to tackle the housing challenges of ordinary Americans, many who are still struggling after the devastating 2008 housing market collapse.
AMY GOODMAN: Well, we spend the rest of the hour on a new book that looks at the devastating legacy of the foreclosure crisis and how much of the so-called recovery is a result of large private equity firms buying up hundreds of thousands of foreclosed homes. The book is by investigative reporter Aaron Glantz. It’s called Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream. In it, Aaron Glantz reveals how the 2008 housing crash decimated millions of Americans’ family wealth but enriched President Donald Trump’s inner circle, including Trump Cabinet members Steve Mnuchin and Wilbur Ross, Trump’s longtime friend and confidant Tom Barrack, and billionaire Republican donor Steve Schwarzman.
Aaron Glantz joins us now, senior reporter at Reveal from The Center for Investigative Reporting, finalist for a Pulitzer Prize this year for his reporting on modern-day redlining. His new book, Homewreckers, comes out today.
It’s great to have you with us, Aaron. What an amazing book! Just lay out what you found.
AARON GLANTZ: Well, first of all, I wanted to know. Eight million Americans lost their homes in the Great Recession. But they didn’t just disappear, right? So we live now in a society where the wealth gap between the richest one-tenth of 1% and the other 90% is bigger than it’s been in a hundred years. And so much of Americans’ wealth is in their homes, because we have very few other ways to save. So I wanted to know: What happened to these houses? Who profited off this mess? And that trail led me to a number of people who are in Donald Trump’s inner circle.
AMY GOODMAN: So talk about them, and talk about how they benefited.
AARON GLANTZ: Well, we start with the crash itself and the failure of the banks. When all of these bad loans came due and there was massive foreclosures, we, the taxpayers, the government, subsidized those foreclosures. And there were a lot of people who lost money during that time, but there were also people who bet on these failed banks and received government support to foreclose. And that included, as you mentioned, Steve Mnuchin, who’s now our treasury secretary. He and his group of other investors, including George Soros, John Paulson, Michael Dell, the founder of Dell Computer, came in and bought IndyMac Bank, which was this failed Pasadena, California, bank, and then proceeded to foreclose on over 100,000 families, including 23,000 seniors. Now, under the deal that he made with the government to acquire this bank, which the government owned because it failed, he and his investors paid the government nothing. And then, although he invested some of his own money in the bank, we then paid him to subsidize his foreclosures. And documents that I obtained under the Freedom of Information Act show that we paid his group more than a billion dollars. And Wilbur Ross, the commerce secretary, had a similar deal at BankUnited, which was another failed bank in Florida.
JUAN GONZÁLEZ: And, of course, IndyMac, as you show in your book, was really the first major bank to collapse, and then a whole bunch — a series of others happened in 2008. And it was basically based on a lot of either fraudulent or predatory lending. If you could talk about that, as well?
AARON GLANTZ: There were a lot of predatory loans going around in the housing bubble. And at this point, we all know that. What I wanted to know was when there were families who got these so-called NINJA loans — right? — no income, no job, no assets, no problem — or these loans that had these teaser rates and then reset at a higher level, and you were told, “Oh, you can just refinance,” or the main character in my book, Sandy Jolley, whose family owned their home outside of Los Angeles for more than 30 years, until they got a reverse mortgage that sapped their equity — and all of these families lost their homes to foreclosure. What I wanted to know was what happened after. Right? We’ve been stuck in this country on this trauma of 2007, 2008, 2009. But now here we are in 2019. Ten years have passed. The unemployment rate is low. The president tells us everything is great. But people don’t feel like everything is great. So, you know, we have jobs, but what happened to our wealth? They took it. That’s what happened.
JUAN GONZÁLEZ: And also, the disproportionate impact that this loss of equity in all these homes had, especially on the African-American and Latino communities, which were even more dependent on home equity for what little wealth they had or net wealth they had.
AARON GLANTZ: What we see is that banks, like Steve Mnuchin’s bank, concentrated their foreclosures in communities of color. And then, when they started making loans again when the economy improved, they didn’t make loans to those communities. So they wiped out the wealth of these communities with foreclosure, but then, over a five-year period, Steve Mnuchin’s bank made three loans to help African Americans buy homes and 11 loans — this is national bank — helped three African Americans and 11 Latinos buy homes over five years.
And now Steve Mnuchin, as the treasury secretary, is in charge of regulating every American bank. And so, he and Donald Trump picked one of his deputies at OneWest Bank, Joseph Otting, for this position called comptroller of the currency, which basically is America’s top bank cop, who’s in charge of enforcing laws, like the Community Reinvestment Act, that are meant to stop redlining. So, this bank, which didn’t make any loans — hardly any — to communities of color is now in charge — you know, this leadership, under President Trump — of making sure that these anti-redlining laws are followed.
JUAN GONZÁLEZ: And it seems to me it’s not just the Trump administration, because it was under the Obama administration there was supposed to be some efforts to help homeowners stay in their homes. And, in fact, Julián Castro, now a presidential candidate, was at HUD supposedly in charge of the efforts to assist homeowners, and that’s come under heavy criticism, what the Obama administration did to help these homeowners.
AARON GLANTZ: This book, you know, some people say it’s an anti-Trump book, because it has Donald Trump on the cover holding wads of cash, with Steve Mnuchin riding on a wrecking ball and, you know, Wilbur Ross pulling money out of a house. But all of this activity happened, as you mentioned, when Barack Obama was the president. The homeownership rate in America, this is what got me started on this book. I started working on this book — it’s an investigative book; it took years to write. I started working on it in 2016, when I didn’t know who the new president was going to be. But I noticed that the homeownership rate in this country, instead of going up during the economic recovery, it kept going down. It went down in 2012. It went down in 2013, ’14, ’15 and ’16. Until 2016, it bottomed out at its lowest rate in over 50 years. And so that’s when I started asking the question, “Who profited?” Under Obama.
AMY GOODMAN: Tell us more about Tom Barrack and Steve Schwarzman, and their relationship with Trump and what they did.
AARON GLANTZ: So, Tom Barrack is Donald Trump’s oldest friend, closest friend, introduced Ivanka at the Republican National Convention, planned the inauguration for Donald Trump. Steve Schwarzman, another old Trump friend, according to media reports, still has the president on speed dial.
Now, we’ve been talking about the foreclosures. Who bought those foreclosures? We have seen a massive transfer of wealth, as I mentioned, not from one group of families who got foreclosed to another group of families who were able to buy homes, but we now have 3 million homes in this country that are owned by LLC, LP and LLP shell companies. And some of the largest buyers of these homes were these private equity funds run by Tom Barrack and Steve Schwarzman.
So, there’s now a company called Invitation Homes, which was founded by Blackstone, Steve Schwarzman’s company, owns 80,000 homes across more than a dozen states. And it’s a publicly traded company now. They have their IPO. So you can track — they track very clearly their rent increases, the relatively small amount of money they spend on maintenance. And also, importantly, because these people are leverage buyout kings, they have been taking these homes and bundling them into this new type of mortgage-backed security, taking on a ton of debt. So, for example, I mentioned earlier Sandy Jolley, this longtime homeowner in Los Angeles area whose family owned their home for more than 30 years before they were foreclosed on by Steve Mnuchin’s bank. Now that home is part of a $960 million mortgage-backed security, bundled with thousands of other homes. So, if you go and look at the property record, you don’t see like a $20,000 home equity line of credit to remodel the kitchen. You see a $960 million lien on the house taken out by a private equity firm.
AMY GOODMAN: We’re going to break and then come back to this discussion. Aaron Glantz is our guest. He was a Pulitzer Prize finalist last year. His new book, out today, Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream. Stay with us.
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AMY GOODMAN: “The Capitalist Blues” by Leyla McCalla. This is Democracy Now! I’m Amy Goodman, with Juan González. Our guest, Aaron Glantz, senior reporter at Reveal from The Center for Investigative Reporting. His new book, Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream. I’m Amy Goodman, with Juan González.
JUAN GONZÁLEZ: Aaron, talk to us about John Paulson, another billionaire hedge fund and equity guy, another big supporter and adviser of Donald Trump, and his role in all of this.
AARON GLANTZ: Well, you know, Steve Mnuchin — we’ve been talking about Steve Mnuchin, the treasury secretary now. He bought this bank IndyMac. But he was just the head of a group that bought this bank. So, Paulson —
JUAN GONZÁLEZ: He didn’t have the real money. He had some money, but not the big money.
AARON GLANTZ: Yeah, I mean, he lives in a 6,000-square-foot apartment on Park Avenue and has another house in Bel Air and another one in Scotland, but that’s not the real money, right? I mean, Paulson had made billions of dollars in the run-up to the housing bust. He was one of these hedge fund guys who saw that we were in a bubble, bet against the American dream and made a ton of money. And then, then he’s like, “OK, now there’s a crash. How am I going to make money on the way up again?”
And so, his staff studied the S&L bailout. All of these guys — all these guys looked at the savings and loan crisis of the late ’80s, which was another time where the government intervened and bailed out the rich at the expense of the rest of us, and they used it as a playbook. And so, one of the things they noticed was that some of the richest deals, the best deals for the hedge fund guys to come out of the S&L crisis came at the very beginning. And that’s why they bet on IndyMac. But what’s interesting is, Mnuchin, another reason he had to put together this group is if any of these hedge funds had put in more than a certain amount of money into the bank in terms of their share of ownership, they would be regulated as bank holding companies, and the government would be able to go in and look at their books. So they all just stayed just a little bit below that threshold to make sure that they would avoid scrutiny.
AMY GOODMAN: So, the debate is tonight, Aaron Glantz. The housing policies of the different Democratic presidential candidates?
AARON GLANTZ: Well, first of all, I would love to hear them talk about it in tonight’s debate. I mean, the moderators have totally abdicated on asking about issues of economic equity. So, as you mentioned earlier, Elizabeth Warren has a plan. Bernie Sanders has a plan. Pete Buttigieg has a plan. Kamala Harris has a plan. I’m not sure if I’ve heard one from Vice President Biden. But I would like to see them engage, you know, on these issues. You know, Kamala Harris says she wants to put $100 billion towards promoting African-American homeownership. The black homeownership rate in this country is below the level that it was at when segregation and discrimination was legal. I’d like to hear her talk to Elizabeth Warren, who has a plan to give massive down payment assistance and rectify redlining. Juan was talking about Bernie Sanders’ plan on rent control and affordable housing. I mean, this is something where the Democratic candidates should engage, in the same way they’ve been engaging on healthcare, and present their conflicting visions and debate.
You know, as I mentioned at the outset, the richest 0.1 of 1% of the American people have the same amount of wealth as the other 90%. And that is because, in America, 80% of most middle-class families’ wealth goes to only five things: food, housing, shelter, transportation, healthcare. All those other things, besides housing, just disappear as soon as you spend your money. Housing is the only way that most Americans have to save. The average American family has $4,000 in the bank. So, either you put your money in equity in your house, or you pay it to your landlord, and if it’s a private equity firm, it goes on the bond market, or you have a little bit for yourself. And I’d like to see the candidates engage on this question.
JUAN GONZÁLEZ: And in terms of — your book also does talk about some of the regulators who attempted to do the best they could to deal with the bank failures. Sheila Bair, of course, is highlighted in your book. Talk about the regulatory climate right now, in terms of being able to protect homeowners, and the lending industry, in general.
AARON GLANTZ: Well, I think, actually, when I looked at the history of America, the thing that jumped out to me was, in this financial crisis, how many people came, throughout the whole process, with really great ideas that were summarily ignored, you know, under President Obama. I write about Alan Blinder, who was a former member of the Federal Reserve Board, who, in 2008, went with a number of other prominent economists, including members of the conservative [American] Enterprise Institute, and said, “Hey, you know, what we need is a government-run bank, like President Roosevelt had during the Great Depression,” which the Home Owners’ Loan Corporation helped more than a million Americans keep their homes. It refinanced one out of every five mortgages in urban America. It invented the long-term fixed rate mortgage. And, guess what, it made money for the taxpayers, because the American people paid their loans back. After World War II, we had the GI Bill. It helped 4 million Americans buy homes. It basically broke even, because the GIs paid their loans back.
Instead, what we had over the past decade is this massive government giveaway to private equity and a few people who are now close friends of the president and in his administration. The really scary thing is that, under President Trump, these people are running the country. And so, they are, bit by bit, taking away the few scraps and reforms that Obama put in place, defanging the Consumer Financial Protection Bureau, weakening the Dodd-Frank Act, which regulated the banks. We’re seeing, as I mentioned earlier, a ballooning number of this new kind of mortgage-backed security, a $960 million lien on a single house in South Los Angeles. So, this is where we’re at. You know, the people who looted us during the Obama years are now running the country. And that’s why the book is called Homewreckers.
AMY GOODMAN: We’ve got just 30 seconds. What shocked you most?
AARON GLANTZ: I think the thing that shocked me most was how many of these good ideas were proposed and how much they were ignored over more than 10 years, and that there really is no reason that we have to be in the situation we are now.
AARON GLANTZ: What motivated me was that I was sitting there in 2016, the election was underway, and I was watching Donald Trump build support with his populist message on the right, which was resonating, and I was watching Bernie Sanders build support with his populist message on the left that was resonating, which meant that the vast majority of Americans thought the system was broken. And yet the unemployment rate was low. You know, the president, Barack Obama, was telling us the economy was going great. But most people just didn’t believe it.
And so, I started to ask, “Well, what happened to all of our wealth? Why do people feel so uneasy?” And so I decided to start to look at the 8 million homes that were lost to foreclosure during the housing bust. How did we lose them? What happened to them? Because they didn’t just disappear. And our country has been like — the housing bust was so traumatic. The journalism is just stuck, right? We’re still on The Big Short, but The Big Short was a decade ago now. So I wanted to do something that brought us up to date. And then —
AMY GOODMAN: Tell us about Sandy Jolley.
AARON GLANTZ: Sandy Jolley was this woman that I found in Southern California, who — you know, just like typical American family. Her dad worked for the water department. Her mom worked at a company that made business checks. They scrimped and saved over many years. They bought this house in Thousand Oaks, which is just outside of Los Angeles. And they lived there for 30 years, until they got sold this reverse mortgage that sapped their equity. If they give — the bank gave them a little bit of cash and then kind of compounded interest every single month. And she fought to get this mortgage reversed. And then, in sequence, her house was foreclosed on by Steve Mnuchin, who’s now — his bank. He’s now Donald Trump’s treasury secretary. Then it was sold on the courthouse steps to a private equity fund, actually a shell company controlled by a private equity fund, that was founded by Tom Barrack, who is Donald Trump’s best friend. And then she ended up paying $42,000 in rent, to rent the house that her family used to own.
Then — then the story doesn’t end, because even after she moved out, she’s like, “OK, enough of this. It’s too traumatic for me to pay rent for my own house.” The house ends up being sold, along with all of these other homes that Tom Barrack bought, to this other company called Invitation Homes, which was founded by another Trump-connected billionaire, Steve Schwarzman of Blackstone, who’s worth about $15 billion. And his company now owns 80,000 homes all across the country. And they’ve started to borrow heavily against these homes, taking out gigantic mortgage-backed securities, which now are building another kind of bubble, like the one we saw, the housing bust. But what made Sandy such a good character for a book is that throughout this whole story she fought every step of the way, and eventually she won an $89 million whistleblower settlement against Steve Mnuchin’s bank.
AMY GOODMAN: Explain how that happened.
AARON GLANTZ: Well, it’s really complicated, but, basically, the nut of it is that Steve Mnuchin, as I was saying earlier, his bank — these foreclosures were subsidized by us, the taxpayers. We were backing up all these loans. And we —
AMY GOODMAN: Steve Mnuchin, the current treasury secretary.
AARON GLANTZ: That’s right, Donald Trump’s current treasury secretary. Ten years ago, when he was running a bank, he struck a deal with the federal government, where the federal government actually paid him, when he foreclosed on families, to mitigate his losses. We paid him, his group, more than a billion dollars.
But there were conditions attached to these payments. He couldn’t just like, you know, foreclose wantonly on people; he had to follow rules. For example, there was one rule related to these reverse mortgages, that if the property had decreased in value, as many of them did during the recession, that you had to offer it back to the family at the value of the loan or 95% of the appraised value, whichever was lower. Right? And there were lots of other rules, very, very complicated rules, that he was supposed to follow.
And what Sandy noticed, as she, you know, dealt with her own 10-year fight against this bank, she started to hear from lots of other families who were going through the same thing. And she became one of these, like, experts in high finance, from her position as just a regular consumer.
AMY GOODMAN: Who lost her home.
AARON GLANTZ: Who lost her home. But even after she lost her home, she still didn’t give up. It was just incredible. Just incredible. So, she’s sitting in her family home, that she’s lost to foreclosure. She’s paying rent to this private equity firm. And even then, she’s not giving up.
And so, she starts googling terms like “federal whistleblower,” and she ends up with this whistleblower attorney in Washington, D.C. She tells him, “I’ve got evidence of a massive fraud.” Whistleblower attorney in D.C. is like, “This is a little bit odd. I’m used to whistleblowers being like corporate insiders or government officials. This is just a regular homeowner in Southern California.” But he — she sends him his paperwork. He even hired a private investigator to look into her, checked out, looked through the paperwork. And anyway, he ends up bringing her to Washington. She meets with the Justice Department. She meets with the FBI. She meets with the HUD inspector general.
And eventually, the bank, Steve Mnuchin’s bank, was forced to pay an $89 million settlement, of which — that went to the taxpayers. She got $1.6 million. Of course, by that time, Steve Mnuchin was no longer in charge of this bank. He was the treasury secretary.
AMY GOODMAN: He was in charge of the entire U.S. Treasury.
AARON GLANTZ: Yes. So, he didn’t have to pay any of this $89 million. Right? He had flipped out of the bank. In fact, one of the things I write about in the book is that, you know, he — being a kind of a hedge fund guy and investment banker, he always intended to flip this bank. But when it came time to sell the bank, Steve Mnuchin lives in this apartment on — apartment building on Park Avenue, 740 Park Avenue. It’s been called the world’s richest apartment building. His upstairs neighbor —
AMY GOODMAN: Here in New York City.
AARON GLANTZ: Here in New York City. And he owns a 6,000-square-foot, two-story apartment. One of his upstairs neighbors is Steve Schwarzman, another Trump friend, who lives in a 20,000-square-foot apartment that used to be home to John D. Rockefeller Jr. And he’s the one who’s been buying up all these houses. But when Steve Mnuchin wanted to sell the bank, after, you know, it had increased in value following the recession, he actually sold it to one of his neighbors in the same building, John Thain, who is — you may remember him. He was the head of Merrill Lynch when he spent federal bailout money on a $35,000 toilet for his office. So, he was Mnuchin’s upstairs neighbor, as well. And so, he and Mnuchin —
AMY GOODMAN: So, when you want to sell banks or whatever, you just go trick-or-treating in your own apartment building.
AARON GLANTZ: Yeah, if you happen to live at 740 Park Avenue — right? — and live in an apartment that’s 6,000 square feet, which is, by the way, one of the smaller apartments in this building. But yeah, now he’s actually trying to sell this New York apartment, Mnuchin is now, because he bought a new mansion in Rock Creek Park in Washington, D.C., because he’s the treasury secretary, and it can be yours, this mansion — this apartment on Park Avenue, for the low, low price of $28 million.
AMY GOODMAN: Aaron Glantz, tell us about Theodros Shawl, why you call him typical.
AARON GLANTZ: Well, when I was a — this, like, gets me back to kind of how I got started, right? And I was — back during the actual housing bust, I was writing for the regional pages of The New York Times in the Bay Area, writing about all of the foreclosures. And I kept running into people who — they were just down on their luck. Right? They had taken on a little bit too much debt. And then something bad happened in their lives.
So, this was a man, an African immigrant living in Oakland, who had basically put his life savings into a small house in Oakland, a little bungalow, and he had spent a lot of his own money remodeling it, and even taking out some home equity loans to remodel, and he was always at Home Depot. But he was a chiropractor. He had a good job, so he was good for it. But then he got sidelined. He couldn’t work. And he ended up with mortgage payments that he couldn’t afford. So he went to his bank, and he said, “You know what? The whole economy is in a state of collapse. I would like to renegotiate my mortgage, so that it’ll lower my payments slightly.” And the bank, Bank of America, which received a $45 billion taxpayer bailout, said no to him.
So, what kind of got me going is looking at what happened after that. I mean, that’s kind of a familiar story, right? Well, what happened after that was that his house was bought by a shell company. And there was this report that came out by a local think tank in the Bay Area, where I live, that found that a huge portion of foreclosed homes in Oakland had been bought by shell companies, far more than were bought by individual families. And so then I just started to wonder, like, “Is this a national trend?” and just kind of pick away — you know, investigative reporter — pick away, pick away, and then, eventually, find the answers.
AMY GOODMAN: And you’re not just talking about homeowners; you’re talking about renters, too.
AARON GLANTZ: Well, homeowners are then becoming renters, right? And then they end up renting from these LLCs. So, you know, we have seen, in 2016, as I mentioned, the national homeownership rate reached its lowest level in more than 50 years. So that means the number of renters reached its highest level in more than 50 years. And we now have not only more renters renting from landlords, but we have new types of landlords.
So, we have 3 million homes and about 15 million apartments, that are not owned by like mom-and-pop landlords who you could call up and have come over and talk to you, and if you fall behind on your payments, you can negotiate with them. We have 15 million apartments and 3 million homes that are owned by shell companies, where if you get in trouble or you want something fixed, it can sometimes be pretty impossible to figure out even who your landlord is. You know, you’re interacting with them through like an online portal. But what happens if you have a problem that requires a human?
AMY GOODMAN: So, you mentioned Steve Mnuchin, the current treasury secretary. Just recently, his former bank, CIT, was ordered to pay an enormous redlining settlement based on activities when he was in charge. Can you talk about how this redlining works and also how the current policies are facilitating what Trump’s inner circle did in the past, and will facilitate even further wealth in the future?
AARON GLANTZ: So, I mentioned, when we were talking earlier with Juan, that when Steve Mnuchin was running OneWest Bank, together with Joseph Otting, who is now also in the administration — he’s the comptroller of the currency, which is America’s top bank cop. And he was the CEO of OneWest Bank when Mnuchin was the chairman. This is a bank that over a five-year period helped three African Americans and 11 Latino families buy homes, at the same time that its foreclosures were concentrated in communities of color.
So, a Fair Housing Act complaint was filed against this bank. I mean, Mnuchin sold this bank in 2015, right? He sold it for $3.4 billion to his upstairs neighbor, right? And now he’s the treasury secretary. But our system of justice works very, very slow. And so, only recently were claims of redlining, based on the behavior of this bank when he was in charge, finally adjudicated. And the bank agreed to a $100 million redlining settlement. So, now that — the good news is that now that, you know, Steve Mnuchin and Joseph Otting are no longer there, the bank is saying, “We are going to invest $100 million in low-income communities and communities of color.” The bad news is that Steve Mnuchin and Joseph Otting are now running the Treasury Department. And the laws that were used to make this settlement, the Fair Housing Act and the Community Reinvestment Act, are being dramatically changed during the Trump administration.
AMY GOODMAN: How?
AARON GLANTZ: So, here is, again, with this banking rules, you get into a lot of jargon. But, basically, the Community Reinvestment Act is this law passed in 1977, signed by President Jimmy Carter, and it requires that banks make an effort to lend in low- and moderate-income neighborhoods. And right now Mnuchin and Otting are going about changing all the rules that are used to enforce this law. So, for example, one of the things they’re talking about is really loosening the restrictions on whether or not banks need to have branches in low-income communities.
Another thing that’s happening — and it’s not Mnuchin and Otting who are doing this, this is over at HUD — Ben Carson is dramatically weakening the Fair Housing Act. For 50 years, there has been this concept, the jargon for it is “disparate impact.” It basically says that if you can use statistics to prove that there’s a pattern of discrimination, you don’t need like a letter from someone saying, “I don’t want to make a loan to black people.” Right? So, for example, last year, we were finalists for the Pulitzer Prize for our analysis of 31 million mortgage records, where we found that there were 61 cities nationwide where people of color were more likely to be denied for a loan, even when they made the same amount of money, tried to take out the same size loan and live in the same neighborhood. So, what Ben Carson is saying is that the rules should be changed so that if when you have a finding like that, it doesn’t prove discrimination. And, in fact, with more and more of these decisions being made by computers now and algorithms, there’s even like a special carveout that says, if the discrimination — if the bank is using an algorithm and it’s resulting in a discriminatory impact, then it makes it almost impossible to hold the bank liable. You know, so they would just say, like, “Oh, I’m sorry, the computer says — the computer says that you don’t qualify.” And that could be like a reasonable excuse.
AMY GOODMAN: What made you angriest?
AARON GLANTZ: I think that what made me angriest was actually the impotence of our government during this whole decade that led to this point — right? — that I did not realize that there was this secret story of very senior people who came constantly, at every step of the way over this 10-year period, with very good ideas —
AMY GOODMAN: From 2008.
AARON GLANTZ: From 2008, from the moment of the bust. You know, I mean, like, remember, 2008, “Yes, we can.” Right? Seems like a long time ago now, right? “Yes, we can. We can change things.” Obama comes in, right? Bush is gone. And all these people came forward, and they said, “We don’t need to bail out the banks. We can have a program like Franklin Roosevelt did back in the 1930s to bail out the people.” And then learning that that New Deal program actually made money for the government as it helped millions — it helped a million Americans stay in their homes, created the 30-year fixed mortgage, and then how, even when foreclosures happened, this government-run bank sold them off one at a time to individual families instead of in bulk to speculators, which is what happened over the last decade. To know that there were like very senior people in the room who were making this argument the whole time, who were just ignored every step of the way.
AMY GOODMAN: And this is all under Obama.
AARON GLANTZ: This is all under Obama. So what we have is, during the Obama years, we have decision after decision being made to give benefits to these homewreckers instead of everyday Americans. And then, with Trump, they end up in charge, running the country themselves.
_________
Aaron Glantz
senior reporter at Reveal from The Center for Investigative Reporting.
— source democracynow.org | Oct 15, 2019