New Book Exposes 'Homewreckers' Who Demolished The American Dream

Speaker 1: 00:00 It's been 10 years since the great recession. Workers were losing jobs, bad loans led to foreclosures, and by the end of it, up to 10 million Americans lost their homes. That's the part of this story of the housing collapse we're familiar with. The other is about the people who profited from it. A new book calls them home wreckers, author Aaron Glantz, senior investigative reporter with reveal with the center for investigative reporting and Pulitzer prize finalist is author of home Rutgers, how a gang of wall street King pinned hedge fund magnates, crooked banks and vulture capitalists suckered millions out of their homes and demolish the American dream. He joins us now. Aaron, welcome. Thank you for having me on the cover of your book are some of the people you refer to as the biggest Homewreckers. There's president Trump, treasury secretary Steve Minutian holding a briefcase full of cash on a wrecking ball along with secretary of commerce, Wilbur Ross and Trump ally Thomas Barrick. What did you uncover about their role in the housing collapse? Speaker 2: 01:01 These men who are now running the country, they're the people who stepped in after the crash and made a tremendous amount of money off our pain. And I wanted to know, you know, when all of us lost, who benefited? And the answer is the Homewreckers. Speaker 1: 01:19 So how did they do it? How were they able to make their profits? Speaker 2: 01:23 Right? So, uh, Steve Minutian is at that point, 10 years ago, uh, going back just a little bit farther to 2008, he buys indie Mac, which was the first big failure of the financial crisis, uh, based in Pasedena, a bank that specialized in Ninja loans. No income, no job, no assets, no problem, uh, specialized in reverse mortgages. Uh, these loans where you never have to pay it back, but the interest in fees just keep adding up and adding up. And then when you die, the bank takes the house. Uh, that bank failed in July, 2008 and [inaudible] leads a group that includes George Soros, John Paulson, Michael Dell of Dell computer, and he buys it off the government for $0 million. And then the government agrees to subsidize his foreclosures and then he expands his banking empire by doing it again by all the buying the failed LA Jolla bank in your neck of the woods and rolling it into his new one West bank empire. And through this whole process, um, we, the taxpayers end up paying his group more than a billion dollars as he forecloses on 100,000 families, including 23,000 seniors. Speaker 1: 02:43 You know, what were the mechanisms that enabled them to do this and make money in the process? Was this even legal? Speaker 2: 02:49 It was not only illegal, but it was government supported. The government was so desperate to get these banks off its hands that it gave sweetheart deals to people like Minutian and Ross who, um, you know, were just basically interested in making as much money as possible. Speaker 1: 03:10 Recently, San Diego mayoral candidate Barbara Brie cited your book in a debate. Here's a clip. And what happened during the great recession is that wall street came, bought hundreds of thousands of single family homes across the United States, tens of thousands in California. And many families are very sadly renting back a house they used to own with no control over their rent. So what kind of impact did these practices have on homeowners and home ownership rates in places like San Diego? Speaker 2: 03:41 The homeownership rate in San Diego and across California was especially hard hit and although it's recovered now to about 60%, uh, it was only recently that we were looking at, you know, almost half of all families, uh, in San Diego, uh, renting. And you know, this is Southern California, right? This is, this is the place where we close our eyes and we imagined the house with the lawn in the suburbs and San Diego is still a place where a lot of people live in houses, in lawns, in the suburbs. It's just that now they're living in a house with a lawn in the suburbs and paying rent to a far away landlord. Speaker 1: 04:20 How have communities of color been impacted by this? Speaker 2: 04:24 This is a crisis that has hit communities of color especially hard. What we saw during the bubble was banks marketing some of their most predatory products to black and Brown people. At Wells Fargo. Uh, there were memos circulated inside of the bank about offering quote unquote ghetto loans to Mudd people. This resulted in those communities facing some of the highest rates of foreclosure. And then as I mentioned, banks did not lend to these communities. I mean, Steve Motrin's bank, uh, which was a Southern California bank, made only three loans to African American families to help them buy homes and 11 to Hispanics. So people of color were disproportionately repossessed then the banks wouldn't give them the good loan products when the economy recovered. And so now we have a wealth gap between the white community and people of color that is worse in many ways than before the civil rights movement. Speaker 1: 05:33 So now that some of those home records are part of the Trump administration, how are they influencing current policy? Speaker 2: 05:39 Constantly, they are constantly influencing current policy. The easiest way to see it is in something like the tax bill where there was a giant tax deduction introduced for companies that collect rent through shell corporations. So if you make your money collecting through an LLC lop or LP shell company, you get a gigantic tax cut right off the top, a tax cut that you don't get if you work for a living. So step-by-step there, changing the incentive system of our economy to make it more advantageous for the corporate owners of rental property and less advantageous for individual homeowners. And what about solutions? What types of reforms would you like to see enacted to keep this from happening again? During the great depression, the government created its own bank. It was called the home owners' loan corporation. It helped a million Americans stay in their homes. It refinanced one out of every five mortgages in urban America. Speaker 2: 06:40 And importantly, it made money for the taxpayers because when you bet on the American family, um, we pay back our, our loans. Um, after world war II, the GI bill helped 4 million American veterans buy homes. It broke even. We can afford to make major investments in economic equity in this country because when we do, they're financially prudent. These were arguments that were made in 2008 by former members of the federal reserve board, by even conservatives at groups like the American enterprise Institute, former advisors to president Reagan. And, uh, the government under the presidencies of both George W. Bush and Barack Obama decided to bail out the banks instead of American families. Now we have a period of time when the Homewreckers are in power in the white house, in circling around our president. Uh, but we also have an election underway. Uh, we have a lot of candidates who are putting forward a pretty innovative plans. And, uh, you know, I've offered one solution from the past, and what I would hope in writing this book and talking to you now is that these issues start to be debated and discussed on some of the biggest stages in America. Uh, so we can move towards a solution. I've been speaking with Aaron glance, author of Homewreckers and senior investigative reporter with reveal what the center for investigative reporting. Aaron, thank you so much for joining us. Thank you. [inaudible].