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.
This remarkable book is a collection of essays about white privilege, Obama’s inability to live up to his campaign promises, and the role of his presidency in setting the stage for Donald Trump.
Coates’ approach to the topic of white privilege is largely historical. He traces the brutal reversal of Reconstruction reforms and re-institution of de facto slavery with Jim Crow laws; the Great Migration north of 6 million African Americans during the early 20th century; the deliberate exclusion of African Americans from New Deal programs such as Social Security, Aid to Families with Dependent Children and FHA (Federal Housing Administration) mortgage insurance; as well as the War on Drugs and mass incarceration of African Americans.
Coates has the best definition of white supremacy I have seen anywhere. In his words, white privilege is “banditry.”
“To be black in America is to be plundered. To be white is to execute and benefit from it.”
Coates gives numerous examples to justify this view: the exclusion of African Americans from wealth creation programs such as FHA and VA (Veterans Administration) mortgage loans, long time job discrimination and wage suppression, the recurrent decimation of prosperous Black communities via white race riots, predatory owner “contract” financing of home purchases, and predatory targeting of Blacks for subprime mortgagae they can’t repay.
My favorite essay is the one advocating for African American reparations, based on the argument that systematic exploitation of Blacks didn’t end with slavery but continues to the present day. As a precedent Coates cites the $7 billion (in today’s dollars) West Germany paid Israel in 1953 in compensation for Germany’s genocidal treatment of European Jews during World War II.