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Examines predatory practices in mortgage markets to provide invaluable insight into the racial wealth gap between black and white Americans.
Homeowners who can't borrow from banks have long turned to the subprime lending industry for mortgages. Increasingly, that industry has turned on them by charging outrageous fees and usurious interest, and then taking their homes through foreclosure. Richard Lord explores the spread of predatory lending practices. And it tells the stories of borrowers who've been taken, contractors and brokers who've been co-opted, lenders who've cheated--and the world's biggest financial titans, who've cashed in. A battle is taking shape that could determine whether home ownership for working people will be an achievable dream or an American nightmare. Richard Lord is a writer for the "Pittsburgh City Paper" whose work on subprime lending has won numerous awards.
Provides an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. Discusses the ways that market participants work to minimize these frictions and speculate on how this process broke down. Continues with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. Presents the key structural features of a typical subprime securitization, documents how rating agencies assign credit ratings to mortgage-backed securities, and outlines how these agencies monitor the performance of mortgage pools over time. The authors draw upon the example of a mortgage pool securitized by New Century Financial during 2006. Illustrations.
Foreclosures are hitting record highs; Americans are declaring bankruptcy at rates ten times that during the great Depression; more college students drop out because of debts than due to poor grades; reports of debtor suicides proliferate in the media. In other words, it's a great time to be in the banking business. Maxed Out takes us on a road trip that is sometimes hysterical and often horrifying: from Las Vegas to the Bible Belt, from the backwoods to inner cities, where the world's largest financial giants troll for their next victims. Welcome to a country populated by debt pirates, corporate predators, human credit card billboards, debt evangelists, megamillion-dollar spec homes, and, of course, trillions of dollars of easy credit. Combining startling facts with even more startling examinations of individuals, institutions, the government, and modern religion, James Scurlock separates the myths (there is "good debt" and "bad debt") from the harsh reality (corporations partner with colleges to target today's youth; credit reports are riddled with errors that will never be fixed; and death, for many of those in trouble, is the only way out). At a time when the financial industry posts ever-higher profits even as its clients drown in the flood of easy credit, Scurlock exposes very real, potentially disastrous systems and policies that are consuming millions of Americans. Maxed Out takes readers on a wickedly smart and entertaining tour of what one interviewee calls "the last taboo."
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Who killed the economy? A page-turning, true-crime exposé of the subprime salesmen and Wall Street alchemists who produced the biggest financial scandal in American history "It's hard to have a guilty conscience if you don't have a conscience. Anything that benefited production - that benefited me and benefited my wallet - I'd do it." The sales force at Ameriquest Mortgage took this philosophy to heart. They watched the Hollywood white-collar-crime flick "Boiler Room" as a training tape, studying how to pitch overpriced deals to unsuspecting home owners. They learned how to forge signatures on mortgage paperwork and create fake documents in "cut-and-paste" operations they dubbed "The Lab" or "The Art Department." In this stunning narrative, award-winning reporter Michael W. Hudson reveals the story of the rise and fall of the subprime mortgage business by chronicling the rise and fall of two corporate empires: Ameriquest and Lehman Brothers. As the biggest subprime lender and Wall Street's biggest patron of subprime, Ameriquest and Lehman did more than any other institutions to create the feeding frenzy that emboldened mortgage pros to flood the nation with high-risk, high-profit home loans. It's a tale populated by a remarkable cast of the characters: a shadowy billionaire who created the subprime industry out of the ashes of the 1980s S&L scandal; Wall Street executives with an insatiable desire for product; struggling home owners ensnared in the most ingenious of traps; lawyers and investigators who tried to expose the fraud; politicians and bureaucrats who turned a blind eye; and, most of all, the drug-snorting, high-living salesmen who tell all about the money they made, the lies they told, the deals they closed. Provocative and gripping, The Monster is a searing exposé of the bottom-feeding fraud and top-down greed that fueled the financial collapse.
LONGLISTED FOR THE 2019 NATIONAL BOOK AWARD FINALIST, 2020 PULITZER PRIZE IN HISTORY By the late 1960s and early 1970s, reeling from a wave of urban uprisings, politicians finally worked to end the practice of redlining. Reasoning that the turbulence could be calmed by turning Black city-dwellers into homeowners, they passed the Housing and Urban Development Act of 1968, and set about establishing policies to induce mortgage lenders and the real estate industry to treat Black homebuyers equally. The disaster that ensued revealed that racist exclusion had not been eradicated, but rather transmuted into a new phenomenon of predatory inclusion. Race for Profit uncovers how exploitative real estate practices continued well after housing discrimination was banned. The same racist structures and individuals remained intact after redlining's end, and close relationships between regulators and the industry created incentives to ignore improprieties. Meanwhile, new policies meant to encourage low-income homeownership created new methods to exploit Black homeowners. The federal government guaranteed urban mortgages in an attempt to overcome resistance to lending to Black buyers – as if unprofitability, rather than racism, was the cause of housing segregation. Bankers, investors, and real estate agents took advantage of the perverse incentives, targeting the Black women most likely to fail to keep up their home payments and slip into foreclosure, multiplying their profits. As a result, by the end of the 1970s, the nation's first programs to encourage Black homeownership ended with tens of thousands of foreclosures in Black communities across the country. The push to uplift Black homeownership had descended into a goldmine for realtors and mortgage lenders, and a ready-made cudgel for the champions of deregulation to wield against government intervention of any kind. Narrating the story of a sea-change in housing policy and its dire impact on African Americans, Race for Profit reveals how the urban core was transformed into a new frontier of cynical extraction.
Why Americans are fleeing our broken banking system: “Startling and absorbing…Required reading for fans of muckraking authors like Barbara Ehrenreich.”—Publishers Weekly (starred review) What do an undocumented immigrant in the South Bronx, a high-net-worth entrepreneur, and a twentysomething graduate student have in common? All three are victims of our dysfunctional mainstream bank and credit system. Nearly half of all Americans live from paycheck to paycheck, and income volatility has doubled over the past thirty years. Banks, with their high monthly fees and overdraft charges, are gouging their lower- and middle-income customers while serving only the wealthiest Americans. Lisa Servon delivers a stunning indictment of America’s banks, together with eye-opening dispatches from inside a range of banking alternatives that have sprung up to fill the void. She works as a teller at RiteCheck, a check-cashing business in the South Bronx, and as a payday lender in Oakland. She looks closely at the workings of a tanda, an informal lending club. And she delivers engaging, hopeful portraits of the entrepreneurs reacting to the unbanking of America by designing systems to creatively serve those outside the one percent. “Valuable evidence on the fragility of the personal economies of most Americans these days.”—Kirkus Reviews “An intelligent plea for financial justice…[An] excellent book.”—The Christian Science Monitor
Exposes abusive lending practices, their impact on the working poor, and what can be done to combat this insidious form of discrimination.