Danny Schechter - ColdType

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tion, vast resources were transferred from the poorest neighborhoods
to the richest institutions. Hofstra University Real
Estate Law Professor Ron Silverman quantified this phenomenon
for me this way: “The severity of a problem of home
mortgage lending in a predatory way may be quantified in the
following terms; you are talking in recent years, of a problem
that every year transfers hundreds of billions of dollars.”
Taken aback by the statement, I had to check that I hadn’t
misheard him, “Hundreds of billions? You said billions?”
He replied, “I said billions, not millions, from the pockets of
the poor to people who are in a far better position than their
so called victims.”
A community organizer in Brooklyn, Rick Echeveria argues
that debt is central to this story, “Debt is profitable. One of
the questions that we’re often asked is, ‘Well, Rick, uh, how
is it that a bank would lend $600 or $800 thousand dollars on
a property that’s only worth $300 or $400 thousand dollars?
I mean, what are they going to do if the ... if the mortgage
borrower doesn’t pay the mortgage?’ And I explain to them
the first lender is selling the debt, and being completely reimbursed.
So there’s no risk for them.”
“Here’s what happens,” adds Ben Barber: “There are three
defaults on mortgages. The bank that holds those sells those at
10 cents on the dollar to a second bank. That bank puts those
together with three other defaults and three other defaults
and makes a second package and sells it to a third Bank. The
third Bank sells 6 of these things from 10 different – from five
different banks to a hedge fund. The hedge fund repackages
them, bundles them and sells them to some investor who has
no idea what he has. And now we have a world of bad debt
and no one can even tell you what it’s – you know, what it’s
worth.”
This Wall Street interest was fueled by the hunger for profits
and bonuses according to Jean-François Gayraud and Noël