Friday, April 8, 2011

Cashing In

 One of the most unsettling aspects of a capitalist society is that there's always someone there to cash in on someone else's misfortune. War is probably the best example and we know what country has that market cornered. But not so obvious is the way that banks are cashing in on our decaying urban centers.
               To describe the city as decaying implies a social and economic evolution that is to be accepted as a part of nature's cycle. For several years, activists on the front lines of the war against foreclosures have been saying that the decline is not natural at all, however. They are calling out, by name and with ample evidence, the banking industry as the main culprit. In a nutshell, the nation's largest banks are profiting from an economic disaster that they, themselves, caused. All that's left is the question of intent.
               Attorneys Vanessa Fluker and Jerry Goldberg are usually too busy defending victims of foreclosure to lay out the argument in full. On top of that, Fluker was recently sanctioned by a zealous Wayne County Circuit Court Judge Robert A. Colombo for $12,000-- he took offense to her appeal in a foreclosure case that cited a pending federal lawsuit against Royal Bank of Scotland. But at a March 25 fundraiser, Fluker and Goldberg were able to rally dozens of supporters by presenting the facts. And the facts in this case don't lie.
               "I think that its important that people understand that this is a fight for the people. And I think its important for people to understand why we are fighting.... We are foreclosing on each other," Fluker told the crowd at Central Methodist United Church.
               Fluker, who testified in front of the U.S. House Judiciary Committee twice in 2010, says most people still aren't aware at how Obama's bank bailout-- which totaled well over $135 billion-- went into effect and how it is being funded. She explains that, as part of the bailout, Fannie Mae and Freddie Mac, the major holders of of U.S. home mortgages, were taken over by the Federal Housing Finance Agency. As a result, the federal government owns or controls approximately 75% of residential loans. So a significant percentage of the sub-prime, toxic loans taken out since 2006 are underwritten and insured by us, the taxpayers, with taxpayer money. It doesn't get anymore corrupt than that. Or does it?
               Fluker adds that banks are being backed by the FHFA the full mortgage amount on foreclosures, even though the same house may only sell for only a small percentage of that on the market. Foreclosed homes in the city of Detroit are being sold for as little as $10,000 or less. The banks have no financial motive whatsoever to stop foreclosures and evictions. In fact, they profit exponentially more by pursuing eviction proceedings.
               "And that full mortgage value is being paid with our tax dollars. Until you understand the vast profits that these banks are making off of the backs of the people, you can't understand why the struggle is so important," Fluker says. "You can't understand why people are being foreclosed on."
               Attorney Jerry Goldberg broadened the discussion even more by connecting the foreclosure crisis to the 2010 census results for the city of Detroit. He says that Detroit has suffered about 75,000 foreclosed homes a year since 2006. The U.S. Census Bureau puts the 2010 population in Detroit at 713,777.
              "When you look at the population decline in Detroit, that population decline was caused by the banks. In Detroit, something like 75-85% of home loans are predatory loans, they were subprime mortgages," says Goldberg, who has lobbied at every level of government for a moratorium on home foreclosures. "It's really the banks, more than anyone else, that have destroyed our city and our neighborhoods."
                The banks are also profiting from the debt service owed to them as the tax base shrinks. Cities like Detroit have been forced to borrow against higher interest rates as their credit ratings decline. Goldberg, a charter member of Moratorium NOW, says that casino revenues, state revenue sharing and state school aid now largely go straight to the banks.
               So the banks are posting record profits due to an economically devastating scenario, with home losses in the hundreds of thousands in this region, that they created. How much longer can they cash in before their criminal behavior is prosecuted? And who but the working people are up to the task?

                This track features the raised voice of activist Sandra Hines, who asked the same questions during a protest march in front of Bank of America on Griswold in 2009. She spoke through a megaphone only, though she hardly needed it. To hear her raw energy being reflected throughout the low rises of Detroit's downtown business district was truly a thing of beauty. If only I'd had a respectable field recording rig to capture it properly. I suppose that the essence is still there.
             The music is an 'outtake' from a body of music that was written five years ago for a local science fiction series-- one of many from Guy Mingo's catalog of undiscovered gems.

   FirstLightFireBack by guy mingo