While we all know now just how corrupt and greedy the banksters were as they precipitated the housing crisis and we have watched as nearly 4 million families have lost their homes since 2008, and those who have been displaced seem to have remained faceless. This is the real crime. The housing market has never really recovered and currently is still in a slump.
Countrywide Financial was one of the sub-prime lenders at the heart of the financial crisis; its predatory lending practices resulted in disgustingly large payouts for executives while sticking low-income borrowers with explosive mortgages they hadn’t a hope of paying back. The New York Times‘ Gretchen Morgenson called Countrywide, “Exhibit A for the lax and, until recently, highly lucrative lending that has turned a once-hot business ice cold and has touched off a housing crisis of historic proportions.”
Eileen Foster was an investigator in charge of Fraud Risk Management at Countrywide when the ticking time bomb of its bad loans detonated. The practices she discovered shocked her and have also shocked those who’ve heard her story—including the producers of “60 Minutes,” who asked her on the program last December to discuss the lack of prosecutions of any of the bankers responsible for the crisis. But instead of cleaning house and admitting guilt, Bank of America—which purchased Countrywide as the financial crisis grew, in what the Wall Street Journal calls “one of the worst deals ever struck in corporate America”–drove Foster out and tried to discredit her findings.
In 2011, the Department of Labor ruled that Foster had been illegally fired. It said that her firing was retaliation for her whistle-blowing and ordered that she be reinstated and paid compensation. There have still been no prosecutions, and no officials have asked to hear Foster’s story—so she’s taking it public. Earlier this year, she was honored with a Ridenhour prize for truth-telling from the Nation Institute and the Fertel Foundation.
The saddest victims of this fraud and deception have been those who have worked their entire lives to have a home to live out their retirement. How can our Justice Department stay silent. Eric Holder should be ashamed of himself for not acting to bring these criminals to justice!
More than 1.5 million older Americans already have lost their homes, with millions more at risk as the national housing crisis takes its toll on those who are among the worst positioned to weather the storm, a new AARP report says. Older African-Americans and Hispanics are the hardest hit. “The Great Recession has been brutal for many older Americans,” said Debra Whitman, AARP’s policy chief. “This shows that home ownership doesn’t guarantee financial security later in life.”
Even working two jobs hasn’t been enough to allow Jewel Lewis-Hall, 57, to make her monthly mortgage payments on time. Her husband has made little money since being laid off from his job at a farmer’s market, and Lewis-Hall said her salary as a school cook falls short of what she needs to make the payments on her home in Washington. Lewis-Hall and her husband have been making their payments late for about a year, but panic didn’t set in until recently, when the word “foreclosure” showed up in a letter from the bank.
“You’re used to living a certain way, but one thing leads to another,” Lewis-Hall said. “It’s not like I have a new car or anything. I’m driving one from 1991.”
According to AARP:
- About 600,000 people who are 50 years or older are in foreclosure.
- About 625,000 in the same age group are at least three months behind on their mortgages.
- About 3.5 million — 16 percent of older homeowners — are underwater, meaning their home values have gone down and they now owe more than their homes are worth.
AARP said that over the past five years, the proportion of loans held by older Americans that are seriously delinquent jumped by more than 450 percent. Homeowners who are younger than 50 have a higher rate of serious delinquency than their older counterparts, but the rate is increasing at a faster pace for older Americans than for younger ones, according to AARP’s analysis of more than 17 million mortgages.
Americans who are 50 or older are hard-pressed to recover from the collapse of the housing market that started in 2006 and was compounded by the recession that started in 2007. Eight in 10 own homes, but many live on fixed incomes, have little savings or have already burned through much of their retirement savings. They also have fewer working years left to build back what they may have lost.
And those who are forced to re-enter the workforce often find they can’t command the same salary that they did in the past.
- How Can You Survive Retirement?
- Mortgage Applications Surge on Refinancing
- BofA Mortgage Offer Gets Surprise Response
Older minorities are facing foreclosure rates that are almost double those faced by white borrowers of the same age, mirroring a nationwide trend seen in other age groups as well. Among older African-Americans, 3.5 percent were in foreclosure at the end of 2011, and the rate was 3.9 percent for Hispanics. Just 1.9 percent of white homeowners were in foreclosure.
The issue has become so dire in Rep. Elijah Cummings’ Maryland district that he has assigned one of his 20 staffers to work full time to help struggling homeowners, and his office holds regular foreclosure prevention workshops. He said the federal government can do its part by promoting principal reduction and loan modification programs. “These are people who in many instances have never missed a payment in 20 years,” Cummings, a Democrat, said in an interview. “You see grown men crying because of the potential loss of a home.”
Among older homeowners, those who are 75 or older are in the worst shape when it comes to foreclosures, the report showed. In 2007, one out of every 300 homeowners 75 or older was in foreclosure. Five years later, about one in 30 face that same fate.
Many of those oldest homeowners may have lost income they were counting on, such as the retirement benefits of a deceased spouse. In the meantime, their mortgage payments have stayed the same. The situation is likely to get worse before it gets better, AARP officials predicted, because of a housing market that is recovering at a snail’s pace. “This crisis is far from over,” Whitman said. “We need to think about more creative solutions now that we have this data.”
We need to outraged by these realities. Enough talk! We need to demand justice. Mr. Holder, respectfully, you have all the evidence you need, how can you not act? If you don’t have the backbone to bring these creeps to justice, then at least just declare all the mortgages illegal and give debt forgiveness to every mortgage holder over fifty as a penalty for the fraud. You have options, please exercise them now.