Transcripts For CSPAN2 Aaron Glantz Homewreckers 20240713 :

As a Senior Reporter for investigative reporting reveals program. He has written three previous books before homewreckers and the thing is that what he has done again has initially looking at veterans of the war because of his reporting half a million ella terry veterans face long lines waiting for disability compensation. His journalism has sparked federal legislation and congressional hearings what he does leads our response by a government and maybe we will see the same thing when it comes to homewreckers. A dupont columbia Journalism Award winner. Twice nominated for a National Emmy for pbs news hour. He is really good at what he does. We are fortunate tonight to interview him Dorothy Brown professor vaught Emory University nationally recognized scholar of tax policy and extensively on the race implications. When i called her and talk to her about coming in participating she was excited because she was eager to read his book i said i have one better. You can actually talk to him. So we are excited they are both here tonight please join me to welcome aaron glass and professor Dorothy Brown. [applause] the title of the book is homewreckers. I wanted to know 8 million American Homes were closed up during the great recession. But they didnt all disappear. The wealth gap in America Today is bigger than it has been in 100 years of the top one tenth of 1 percent and the other 90 percent. The homeownership rate is at its lowest level in 50 years. Is important people understand it didnt just go down in 2008 and 2009 it continued 11, 12, 13, 14, 15 and bottom out 2016. A book takes a few years to put together and i was sitting there in 2016 watching donald trump with his populist insurgent campaign for president at a time the economy was supposedly doing well with low unemployment many executive quarters of growth but america is angry. And Bernie Sanders is doing incredibly well the same populist message. So it seemed that housing would be a fruitful way to focus. So i basically started with a question 8 million americans lost their homes we lost our wealth where did it go . Who took it. The homewreckers. One of the things i think about is homeownership is the typical American Family has a lot of equity in their home. So when you lose a home that you cannot leave to your child or grandchild is a significant event so not only 8 million homes that has that intergenerational impact. Homeownership is the only way that most americans can save. The average american has 4000 in the bank we are paycheck to paycheck society where most of the money goes to things Transportation Health insurance premiums clothing and food and all of that disappears the moment we spend it. Housing is the biggest expense that either goes back into our home in the form of equity to pass on to our children enjoy a healthy retirement or a landlord and they enjoy all of that. So when you say homeownership is at the lowest rate in 30 years you talk about the dispossession of peoples ability to live the american dream. According to the senses the average homeowner in this country is worth 100 times more than the average rent or me at 200,000 versus 2000 this is because homeowners make 100 times as much money. I make the same amount as my colleagues who went but i am worth more because i own my house. Not only that but in the city of San Francisco which is rapidly gentrified. People are affected evicted and displaced and rents go up now i have 30 rate 30 year fixedrate mortgage paying less than my friends that are renting and i have savings and now if i have a medical event or cant afford to send my daughter to college or i want to retire i could have that ability through the equity. And my colleagues dont if they dont own their home. Part of the story of homewreckers deals with those mortgages. How did you get into researching about those quick. I was mostly interested in the bank called indy mac. Is the first big bank to fail in the housing bust in fact it was the biggest since the Great Depression the government ended up holding this disaster of a bank. This man is famous not only for reverse mortgages but also ninja loans that were popular that meant no income no job no assets no problem. Disneyland loans who claim to make 90000 they just approved it with no paperwork. That was indy mac when the Housing Market softened they went bankrupt and then there was a dramatic run on the bank that was out of the depression people were pushing and shoving on the streets of pasadena but now the pictures were in color. Now Stephen Nguyen who is now a treasury secretary stepped into brought on by the bank for nothing and then the government made a deal with him we would subsidize his foreclosures that he could not take a loss. Initiative foreclose with the bank because you lose money. We agreed to pick up 90 percent of the tab and i got records we paid his group more than a billion dollars to foreclose and he foreclose on more than 100,000 people in 23000 seniors. That closed on over 100,000 people at the homeownership rate at a record low run by the treasury secretary like sheets of bills lives in the worlds richest Apartment Building on park avenue. You mention the reverse mortgages. So i was pulling the string as a journalist and then i became interested in the private equity firms that actually bought these houses after foreclosure. And a fan found a house in los angeles he was renting from a private equity firm that was owned by the best friend donald trump who had bought 30000 homes after the best so i knocked on the door and the guy who came he was sick with aids and dying of cancer facing a rent increase. So like a good reporter i looked at the property record what happened before they bought the house at 180,000 . Thats when i found that this house was owned by the same africanAmerican Family moved west from the mississippi during the great migration finally able to buy this house in 1963 the very year california banned discrimination in housing. That is the year they were finally able to become homeowners forgot they were foreclosed on because of one of these reverse mortgages. So now i have this house that wasnt just one member of Donald Trumps inner circle this is one dash displacing a family that two of them. As i continued i found this house was bundled into a mortgagebacked security by j. P. Morgan chase now there was a 514 milliondollar lean on this home and then subsequent publishing that story in 2017 tom barrett decided to flip out and sold his interest in now was acquired by another one of Donald Trumps friends who is the chairman of blackstone and in vacation homes that owns 80000 and with the same house with her africanAmerican Family and to be foreclosed on the Stephen Nguyen bank. And then to be bundled into a mortgagebacked security and then it fell to another one of trumps best friends and others a billiondollar lien on the house so thats not an article just really complicated. You mention the africanAmerican Family. What did you see. That is our reality with this country the back of the thirties when president moto one dash before but president in the new deal we didnt have mortgages like that one the new deal. Or people paid cash which is why homeownership rate was very low. Before that the homeownership rate in omaha was 20 percent but there were people who worked for the government and then they said people of color were red dont make loans here. And that persisted through the 19 sixties so the Home Owner Loan Corporation to refinance one out of every five men to buy homes after world war ii. So for the family that i wrote about who bought this home in south l. A. For them to overcome all of that plus a structural discrimination to move across the country to l. A. And finally by this house in 1863 that is an incredible accomplishment but then this is a story that we have this predatory lending that was endemic so these reverse mortgages offered by Companies Like indy mac would give a relatively small amount of money then compound interest and fees so the Butler Family lost their house. The sun of the parents he paid a lot of money to rent an apartment. His daughter she rents. Everybody rents. Because it can be so hard to get back once you lose that. Because these were so emblematic of what happened especially since the bank in california was nearly 70 percent of foreclosures but the problem with this family is at they gave up that you need action and sometime after that anyway i wrote a book proposal anyway. So i knew in the back of my mind i did not have enough so sandy was white lived in a more affluent part of los angeles. Solid middle class her father worked for the Water Department her mother worked for a company that made payroll checks they were white they buy the house with another v. A. Loan 1500 square foot home three bedrooms. And they also were sold a reverse mortgage but unlike the butlers sandy fought and she fought them for ten years and she saved everything. Journalist like people that save everything. [laughter] and she was nice enough to allow me to enter her life to tell her the whole story from the moment her parents were sitting at home watching James Gardner sell the a reverse mortgage they call the number and a man came to their door with a Powerpoint Presentation the last slide i am not kidding said whats the catch . Nine. There is no catch. From that moment in 2512 years later she won an 89 milliondollar whistleblower settlement for taxpayers against the bank and she let me into that world and she talks about all these Trump Associated homewreckers. Even though we talk about how america in general but. Then they bring that back with the exorbitant amount that if you want to go monthtomonth you have to pay extra. And then she has to write the check. Was a company that did not make sense. The amazing thing about the story which is one reason wanted to write the book. And what was familiar to people but was not familiar is what happened after that . That is where the story ends. So sandy goes to the auction with able sell her how she drives up to ventura and shows up at the warehouse and confronts all the people there and printed out information why they should not bid on her house. She hands them a flyer. Dont do it. And tell at the last minute there is a woman who comes she sets up a table and plugs in the bluetooth. They try to give her the flyer. She buys the house 330,000. So she walks back to her car and she just sits there and says where am i going to go . She does the only thing she can do is drive back to her house which is no longer her house and then to say we lost our family home and then hears the sound she saves everything in there is a noise with blue masking tape and it is an eviction notice. She comes to the door and confronts the man and simultaneously gives her the eviction notice which is signed by a Company Called Holding California 511 c and a letter that says should anyone tell you you are being evicted this is not the case. We would love you to stay as our tenant. She goes onto the internet and who the hell are they crack she figures out it is part of a big company but i explained to her is run by tom barrett who is Donald Trumps best friend so anyway 18 months she lives as a tenant she pays 42000 in rent over 18 months for a house her parents had bought for less than 90000 in the eighties and it was bought and paid for with a reverse mortgage. Almost. Their mortgage payment at the time was 600 a month and it would have been paid off very soon. She fought the reverse Mortgage Company that her parents her mother did not know what day of the week it was. And the banks medical experts said she was completely fine to sign this. They painted sandy as a villain because she is just her moneygrubbing daughter she doesnt care about her parents who decided they needed this product she is interfering with their will. So she pays 40000 and another important thing about this company is she loses the lawsuit she appeals again and again and again thats why it drags on for so long finally she goes to the courthouse and then chartered by tom barrett. So now she has a least not only did they raise her rent three times and 18 months, it is a feature to push all maintenance on to the tenant. So they say the window cracks are up to you so not only are you paying more and more in rent but you have to fix things when they break. So how would you ever have enough money as a tenant to get back into Home Ownership . So is not just that they foreclose but keep you out and lock you out. Is there anything that surprised you when you were writing . You were doing all this reporting but was there anything when you thought about it or discovered it said oh my gosh that i never knew that . What surprised me the most was how many people saw this and warned about it and were not listen to. To learning the extent of which all of this was predicted by some very smart people in 2008 and they went to not only the current president george w. Bush but also nancy pelosi and Chuck Schumer now the Democratic Leaders and they were in charge of the whole congress then and they said you could bail out the wall street guys you could do what president roosevelt did during the Great Depression and i already mentioned helping 1 Million People stay in their homes refinancing one out of every five loads in urban america. And make this available to all people and they pointed out something i did not know about which is a program that they made money from the taxpayers because American People given a non predatory mortgage usually pay it back with interest. So the homeowner corporation made money the g. I. Bill broke even. So these people federal members of the Federal Reserve Board Members of aei. And to say it is fiscally responsible. And in front of these Democratic Leaders and with that battle that ensued no no no they just laughed us out of their office. So in a way that was very dispiriting but in another way its encouraging to know that these ideas that are here with us. So its very inspiring actually so the most surprising but also the most inspiring. There is a moment in history or a moment in time with the right idea and we could change . I think people are hopeless that they look at the homewreckers and wonder what can we do in this new deal program we are constantly told we cannot afford equity. But i told you we paid more than a billion dollars for steve nguyen to foreclose on people be made the same deal with wilbur ross. We subsidize tom barretts purchases on these homes in the Fannie Mae Freddie mac the government owned over 200,000 homes we could have sold them off individually to families like roosevelt instead we sold them to private equity firms horse pennies on the dollar we subsidize them so much. So knowing that if we dont subsidize in our own people we will make money for our government that is an incredibly empowering thing to realize in the course of writing a book over bad things that have happened. To see republicans and democrats it wasnt just republicans that didnt think helping homeowners was a good idea but also democrats. I lived through all of this so i know that the president obama was the president the whole time with obama elected yes we can 2008. Know we didnt. [laughter] i know homeownership declined every single year of the obama presidency. That is the fact. I know that happened. It wasnt really a surprise but i didnt know why. So that is where the investigation came in. I remember at the time there was talk of homeowners do we bail out the banks. I remember hearing talk that homeowners will just encourage bad this decisionmaking i dont need a bailout or a mortgage and i remember hearing some of those arguments as to why they dont want to bail out homeowners do we see a similar argument . Like lets make college debt free. Did that play a role at all how elected officials paid attention to the issue. We have so many opportunities. Those decisions that were made and what i am noting is that things continue to move into one direction through 2016. There were many different moments that it was made to shovel more money to the American People so for example in 2011 the government was awash 200,000 properties. And then it made its first deal with tom barretts company to sell him 1000 homes across l. A. And phoenix and loss vegas instead of to those families that could be summarily able to benefit from that discount. They would take a huge haircut why not pass that on to families why give that benefit to private equity firms . That was 2011 and 2012. And then we get into leveraging. In 2014 that is when you start to see these liens recorded on these properties of 500 million now looking at the property records of this bungalow now seeing a 500 milliondollar lean and saying how can this be in the property law professor says yes. What they have done is bundled thousands of homes together and pull out all the equity so isnt this what we were all accused of doing during the bubble . And the answer is yes that is why i named j. P. Morgan chase and jamie dimon is one of my homewreckers because they also operate with a debt. They are not spending their own money. No. They are getting it somewhere so the biggest lender for these mortgagebacked securities incl