Why America’s in Foreclosure

By Tanya Dennis
and  Les Jamieson

Tanya Dennis’ partner Ulysses “Jim” Montgomery (standing at the doorway) defended her home against Wells Fargo.

The US economy was on the brink of collapse during the summer of 2008 when George Bush was President. He and his Secretary of the Treasury, Hank Paulson, warned the nation that if the government did not bailout the banks a financial Armageddon would occur.
Taxpayers, who became hostages, were told to just turn over $750 billion to save the “too big to fail” casinos masquerading as banks, to keep the US economy afloat. One has to wonder what could bring a powerhouse economy the size of ours to its knees. Couldn’t some high paid crook or think tank figure out that the mass migration of jobs outsourced around the world would cause hardship for our entire system? Do we need an economic Einstein to tell us that for an economy driven by consumption to grow, there must be consumers with expendable income?
Now let’s add another layer that shocks the conscience. Under the Clinton administration our government eliminated the Glass-Steagall Act, which was instituted in 1933 as a mechanism to regulate banks by restricting them from risky and greed-driven business practices which helped cause the Great Depression.  Repealing this Act cleared the way for banks to resume these practices, allowing them to diversify into securities, mortgages, and insurance. They wanted to become “financial supermarkets”.
Now let’s add the home loan piece of the pie in the sky. Wall St. had an insatiable appetite for home loans to package into mortgage-backed securities to sell around the world. They just needed more home loans, so why not make everybody eligible to buy that $600,000 3-bedroom home with a pool. The banks, through sub prime lending practices that extended credit, with misleading terms and conditions to those whose incomes would not normally qualify, happily misled people into believing they could afford it. Sub prime became king.
Banks issued loans at low teaser rates. Some adjustable mortgages had increases actually resulting in a higher principal than originally agreed upon. Just like my own loan from the World Savings Pick-a-Pay loan program. A note for $400,000.00 could wind up being $420,000.00 after a few years of paying interest only. Mortgage brokers who knew that interest rates on these adjustable “instruments” would soon rise beyond reach, promised to refinance in a year to a lower fixed rate. But due to people having lower credit scores and then the unavailability of new loans, these new fixed rate loans never materialized. Add in the masses of job layoffs. Foreclosure was then the inevitable result for millions. Minorities were specifically targeted, although people across the spectrum have been affected. Even upscale communities have been damaged by the “mortgage bubble economy”, leaving people paying more than their property is worth.
Most homeowners had no idea of the dangers, because the details were so well hidden. Far be it from the bank to reveal the real terms and conditions. The courts protect the banks very well by saying they have no fiduciary duty to a borrower. Imagine that. Banks refuse to reveal phrases that result in the waiving of your rights, which is outright unconstitutional. They misled people about the true costs, yet they have no duty to act in good faith. No wonder America ’s in foreclosure.
Be part of the solution. If you have a story to tell, contact Tanya Dennis at tanyaddennis@yahoo.com.
Tanya Dennis, who teaches in Oakland , is also a columnist for the Post News Group.
Wells Fargo Bank, which acquired Dennis loan when they purchased Golden West Savings, has paid fines for lending abuses. The Post has contact Wells Fargo’s attorneys for comment.