The Con Part 1
Directed by Patrick Lovell (2021)
Part 1 of this five-part documentary concerns one of the rare US criminal prosecutions of the bankers responsible for the 2008 global financial crash.
The prosecutions occurred in Akron Ohio, after a state legislator became suspicious of a tidal wave of foreclosures in a low income African American neighborhood. It really bothered him that local appraisers were consistently appraising homes at two or three times their actual value.*
Police investigators subsequently learned that mortgage brokers were repeatedly falsifying and forging loan applications, as well as going door-to-door pressuring elderly residents to apply for mortgages for costly home repairs. One real estate agent foreclosed on and resold the same home two or three times.
Eventually the agent, and managers at Evergreen Finance (the mortgage company) and Carnation Bank were all arrested, prosecuted and sent to prison.
In the process, investigators learned similar “tidal waves” of fraudulent mortgages were occurring in all 50 states. In many cases, local banks went on to sell these mortgages to Goldman Sachs and other Wall Street investment banks. The latter reaped immense profits by “bundling” these subprime mortgages (which low income home owners had no hope of repaying) into mortgage-backed securities they sold to clients. However only in Ohio did banksters go to prison for their fraudulent activities.
The film’s producer Patrick Lovell is from Akron and had his own home foreclosed on in during the financial crisis. Akron was also home to Addie Polk, a 91 year old African American woman who shot herself (in 2007) just as sheriff’s officers were arriving to throw her out of her home. She was unable to meet a balloon payment on $58,000 worth of mortgage loans (on a $25,000 house) she was conned into signing up for in 2001 and 2004.
*To help low income residents qualify for subprime mortgages.