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NY Review of Books, JUNE 11, 2020 ISSUE
The Housing Vultures
Francesca Mari
Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates,
Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their
Homes and Demolished the American Dream
by Aaron Glantz
Custom House, 398 pp., $27.99
“They control the people through the people’s own money.”
—Louis Brandeis
1.
In an alternate reality, the one progressives wanted, the government
wouldn’t have bailed out the banks during the 2008 crash. When
mortgage-backed securities began catching flame like newspaper under
logs, the government would have prioritized struggling homeowners
instead. It would have created a corporation to buy back the distressed
mortgages and then worked to refinance those mortgages—lowering monthly
payments to reflect the real underlying values of the homes or adding
years to the mortgages to make the monthly payments more manageable. If
a homeowner missed mortgage payments, rather than initiating a
foreclosure after two months, as was done by many banks during the
recession, the government would have held off for an entire year, maybe
more. In the event the homeowner still couldn’t keep up, the government
would have acquired the home, fixed it up, and rented it out until
another person bought it.
Who could ever dream up such wild ideas? Franklin Delano Roosevelt, for
one. To stanch foreclosures during the Great Depression, FDR created the
Home Owners’ Loan Corporation (HOLC), which bought more than a million
distressed mortgages from banks and modified them. When modification
didn’t work, it sold the foreclosed homes—200,000 of them—to
individuals. While the program was costly, in the end it pretty much
paid for itself: because homes weren’t dumped on the market all at once,
they almost always sold for close to the amount of the original loan.
The New Deal—which also created the Federal Housing Administration
(FHA), to guarantee mortgages with banks, and the US Housing Authority,
to build public housing—inaugurated the golden era of homeownership and
middle-class prosperity. It wasn’t without significant problems—the HOLC
invented redlining, only providing FHA-backed loans to white people
purchasing in white neighborhoods—but if you were white, this was a
stabilizing and egalitarian response that held speculators at bay.
Homewreckers, Aaron Glantz’s recent book about the investors who
exploited the 2008 financial crisis, is essential reading as we plunge
headlong into a new financial catastrophe. Glantz, a senior reporter for
the Center for Investigative Reporting’s public radio show, Reveal, has
written books on the mishandling of the Iraq War (How America Lost Iraq)
and the neglect of veterans that followed (The War Comes Home). He
observes that there are two ways a government can respond to a crisis
caused by reckless speculation: by stepping in or by stepping aside.
Roosevelt stepped in; Ronald Reagan, dealing with the savings-and-loan
crisis, stepped aside. Starting in 1986, as a result of Reagan’s
deregulation, countless savings-and-loan associations had run amok with
other people’s money, taking risky bets; 747 of them imploded.1 But
rather than restructuring the toxic debt, the Reagan administration sold
it to “vulture investors,” those who profit off disaster by swooping in
to gobble up the cheapest, most troubled assets from failing entities.
The government sold at firesale prices with lucrative loss-share
agreements: whatever money an investor recovered on the debt was its to
keep, but losses would be guaranteed by the government. The deals cost
the US government more than $124 billion in subsidies.
The George W. Bush and Barack Obama administrations, alas, hewed closer
to Reagan’s example, spending $700 billion on the Wall Street bailout
and frantically trying to attract investors to the collapsed housing
market by auctioning off delinquent mortgages at low prices and with
loss-share agreements that essentially guaranteed that the investors
wouldn’t lose money. These policies not only provided firms with
financial incentives to pursue foreclosures but also enabled an enormous
and permanent transfer of wealth from homeowners to private equity
firms, as thousands of homes were flipped or converted to single-family
rental homes and rented at above-market prices.
Glantz’s book is an unabashedly partisan tale of how some extremely
wealthy investors—many of them now Trump’s cronies—preyed on panic at
the expense of middle-class homeowners. Homewreckers opens with two such
victims in 2005: Dick and Patricia Hickerson, seventy-nine and
seventy-seven, with liver cancer and Alzheimer’s. After seeing a
television ad for a reverse mortgage, a financial product that allowed
seniors to borrow cash against their homes without repayment during
their lifetimes, the couple called the number on the screen and were
pressured into signing by a pushy salesmen working on commission. They
didn’t understand the price their daughter Sandy, who had quit her job
and moved home to take care of them, would pay.
The interest rates and fees were so high that by the time they died, in
2011, their $80,000 loan had ballooned to a debt of $300,000. Their
$500,000 home went to foreclosure auction, where it was bought by a
private equity–backed real estate investment trust. The Hickerson’s
mortgage had been $600 per month. Now the private equity company was
offering to rent the home back to Sandy for $2,400, a rent 30 percent
higher than that of other properties in the area. Too overwhelmed to
move, she signed the lease. It included a variety of fees (such as a
$141 monthly fee to rent the house month to month) and left her
responsible for typical landlord duties, like landscaping. In return,
the company shirked maintenance, at one point declining to fix a broken
water pipe, sticking Sandy with a $586 water bill and a $450 repair. (As
I’ve noted in The New York Times Magazine, minimizing maintenance costs
and maximizing service fees are integral to single-family rental
companies’ business models because private equity generally seeks
double-digit returns within ten years.2)
This exploitation of a regular family may seem like a minor story. But
as Glantz shows, it happened over and over in similar ways across the
country, systematically turning middle-class homeownership into
immiseration and corporate profits, facilitated at every stage by the
federal government.
2.
By February 2008 the subprime mortgage problem was evident—housing
prices were plummeting—but Bear Stearns was still a month away from
collapse. Connecticut senator Christopher Dodd and former vice chairman
of the Federal Reserve Alan Blinder were calling for a revival of the
Home Owners’ Loan Corporation to lend homeowners between $200 billion
and $400 billion. “I was laughed out of court,” Blinder told Glantz.
Instead, eight months later, Congress approved a $700 billion bailout of
the banks.
The first FDIC-insured bank to fail had been IndyMac, on July 11, 2008,
after an eleven-day bank run resulting in $1.3 billion in withdrawals.
The day it failed, FDIC employees reluctantly boarded a flight from
Washington, D.C., to Los Angeles. They seized control of the
Pasadena-based bank, a notorious generator of reverse mortgages
(including the one the Hickersons signed) and Alt-A mortgages (riskier
than prime but less risky than subprime), and sought a buyer. They hoped
it would take days; it took nearly nine months, the value of the bank
decreasing with every passing week.3
That’s when a band of billionaires stepped in. Exploiting the Fed’s
angst about continuing to manage IndyMac, the group, which included
George Soros, Michael Dell, John Paulson, J.C. Flowers, and Steve
Mnuchin (the only nonbillionaire of the bunch), offered to invest $1.6
billion in the bank in exchange for all of its assets—its branches, real
estate deposits, and loans, which were valued at more than $20 billion.
Concerned about the appearance of a prolonged federal takeover and thus
anxious to close the deal, the government also agreed to extend a
generous loss-share agreement: If, for instance, a homeowner owed
$300,000 on an FHA-insured mortgage, but the home only sold at
foreclosure auction for $100,000, the government agreed to reimburse the
rest, all $200,000. While the sale technically required the company to
continue the FDIC’s limited loan modification, as Glantz writes, the
loss-share agreement “effectively removed economic incentives that would
have otherwise caused Mnuchin’s group to think twice about foreclosing
on homeowners.” Upon acquiring IndyMac, Mnuchin and his group renamed it
OneWest and proceeded to foreclose on more than 77,000 households,
including those of 35,000 Californians.
The California attorney general’s office put together a robust report
against the bank, detailing widespread misconduct, which included
backdating false documents, performing foreclosure actions without legal
authority, and violating proper foreclosure notification practices. “If
the state of California found that OneWest violated those rules,” Glantz
writes, the loss-share payments could stop—saving both homeowners, since
the bank would have much less incentive to foreclose if it wasn’t being
paid when it did so, and government money. But the attorney general at
the time, Kamala Harris, did nothing.
With its loads of recovered debt, OneWest—which newly billed itself as a
“community” bank—could begin to offer loans. But rather than financing
community initiatives or middle-class mortgages (it denied both in great
numbers), it lent vast sums to the investors’ friends, like Thomas
Barrack, the private equity titan, Trump megadonor, and founder of
Colony Capital.4 Barrack, in turn, used the money to pursue a new idea.
Starting in 2012, he began to buy foreclosed homes in bulk—to turn them
into rental properties and keep them forever, or for as long as he
retained interest. He targeted heavily discounted houses in areas with
high employment, good transportation, and strong school districts. His
hometown of Los Angeles certainly fit the bill. He scooped up more than
three thousand houses there, including the Hickersons’, which would
eventually be managed under a Colony subsidiary, Colony American Homes.
As Eileen Appelbaum, the codirector for the Center for Economic and
Policy Research, told me:
This industry of rental homes at this kind of scale is a product of
government policy. I know that the private sector says they don’t like
government interfering, but in fact they love the government in their
business.
Or, as Barrack has said, “Anytime the government is intervening in our
business, if you buy, you will be successful.” Overdue and panicked
government intervention is the vulture investor’s best friend.
3.
Barrack wasn’t the only one. Across the Sunbelt—from California to
Florida—investors had the same idea. In Las Vegas, Phoenix, and
California’s Inland Empire, the prices of millions of starter homes
(those under two thousand square feet) had dropped by more than half
since their 2006 peak. Private equity firms snapped them up. Barry
Sternlicht, the founder and CEO of Starwood Capital Group and a veteran
of the savings-and-loan crisis, amassed thousands. B. Wayne Hughes, the
multibillionaire founder of Public Storage, the country’s largest
self-storage company, started American Homes 4 Rent, which now operates
54,000 houses. But the biggest buyer was Blackstone, the nation’s
largest private equity firm, which funded a subsidiary called Invitation
Homes whose representatives traveled with cases full of cashier’s checks
to auctions around the country, spending as much as $100 million per
week. In 2017 Invitation Homes merged with Waypoint, which had bought
Colony two years before, creating the largest single-family rental
company in the country, with more than 80,000 houses. No longer were
these homes a way for the middle class to accrue savings—now they were
lucrative investments for the very rich.
The Obama administration facilitated the transfer of wealth from
homeowners to private equity firms in two ways. A house that goes to
foreclosure auction but doesn’t sell is repossessed by the bank that
holds its mortgage, becoming what is bewilderingly referred to as a real
estate owned home, or REO. By August 2011, the federal government owned
248,000 repossessed and unsold properties, nearly a third of the
nation’s REOs. In 2012 the HUD launched the Real Estate Owned-to-Rental
pilot program, encouraging investors to buy bundles of the
government-owned REOs if they agreed to maintain them as rental units.
The pilot put 2,500 homes in Chicago, Riverside, Los Angeles, Atlanta,
Las Vegas, Phoenix, and various cities in Florida up for auction in
batches. Meg Burns, senior associate director of housing and regulatory
policy for the Federal Housing and Finance Authority, said the program
was intended to “gauge investor appetite” for single-family housing and
to “stimulate” the housing market by “attracting large, well-capitalized
investors.” Treasury Secretary Timothy Geithner, meanwhile, argued that
creating new options for selling foreclosed properties would “expand
access to affordable rental housing”; this turned out to be gravely
mistaken.
In a congressional hearing on the program, Michigan congressman Bill
Huizenga asked, “How are we going to do this in a way that makes sense
and doesn’t do further harm?” But some, like Congressman David
Schweikert, who represented hard-hit Maricopa County in Arizona and
identified himself as “the largest buyer of single-family homes in the
southwest,” balked because only a tiny fraction of homes were made
available to investors. “I can take you through neighborhoods that have
been devastated by foreclosures and look better today than they have in
30 years,” he said. “Because one, two, three, four, foreclosure,
investor bought it, new roof; one, two, three, four, foreclosure, new
family, new landscaping. It has become almost an urban renewal.”
Barrack’s Colony Capital was one of the biggest winners in the HUD
auction, outbidding five other investors to acquire the largest
bundles—970 houses. (According to the Paradise Papers, financing came
from a Japanese bank and investors ranged from South Korea’s National
Pension Service to an investment company in Qatar, and a plethora of
shell companies in California, the Cayman Islands, and the British
Virgin Islands.) While the pilot program didn’t originate the idea of
the single-family rental, it gave the government’s imprimatur to the
concept and signaled that the government wouldn’t intercede.
The second way in which the Obama administration facilitated the rise of
the single-family rental industry is more complicated. The government
took on $5 trillion worth of bad FHA-insured mortgages when it assumed
ownership of Fannie Mae and Freddie Mac in 2008, then auctioned that
debt off through the Distressed Asset Stabilization Program (DASP) with
almost no safeguards. Notably, the investors were not required to offer
the floundering homeowner a principal reduction to reflect the decreased
value of the home, or to work out any other reasonable loan
modification, or to offer the homeowner first dibs on the property if it
went to sale. The next act is, by now, familiar, a mirror of what
happened at OneWest. By the end of 2016, Fannie Mae and Freddie Mac had
auctioned more than 176,760 delinquent mortgages at fire-sale prices, as
much as 95 percent of them to Wall Street investors; the mortgage terms
these investors subsequently offered homeowners were terrible, because
pushing homes through foreclosure was the most expedient way to cash in
on the investment.
How many of these mortgaged homes ended up in foreclosure auctions,
where they were then scooped up by private equity? Glantz doesn’t have
the figures (they are nearly impossible to get), but he draws our
attention to the larger, underlying problem: how the one percent has
managed to monopolize credit.
4.
“The great monopoly in this country is the money monopoly,” Woodrow
Wilson said in 1911, while campaigning for the presidency. “So long as
that exists, our old variety and freedom and individual energy of
development are out of the question. A great industrial nation is
controlled by its system of credit.” Glantz quotes this not once but
twice, for obvious reasons.
In 2013 Blackstone’s Invitation Homes created a new financial tool to
unleash even more credit: the single-family rental securitization. It
was a mix between commercial real estate–backed securities, which are
backed by expected rental income, and residential mortgage–backed
securities (the ones we most commonly hear about), which are backed by
the home value. The single-family rental securitization was backed by
both. Colony American and other single-family rental home companies
followed suit. More than ten companies have entered into the market,
together owning some 260,000 single-family homes and generating seventy
securitizations totaling $35.6 billion.
Mortgage-backed securities aren’t inherently bad. In fact, they are a
government invention, born out of the New Deal. Prior to that, banks
only offered loans for three to five years with 50 percent down,
limiting property ownership to the rich. By enabling banks to sell
mortgage debt as bonds, the government allowed banks to distribute risk
among investors, making long-term, low-interest loans possible. The
result was the thirty-year mortgage, a distinctly American product (to
this day, Denmark is the only other country where it’s available; other
countries typically offer five-to-ten-year loans with balloon payments
due at the end of the term, which can then be refinanced.) With the
thirty-year mortgage, middle-class families could slowly build wealth
and secure housing stability. But there needs to be oversight, and the
incentives ought to align with the interests of the public.
Like the subprime mortgage–backed securities that precipitated the 2008
crash, single-family-rental-backed securities are effectively
unregulated. And until now, they’ve been extremely stable: a company
isn’t apt to default on a mortgage, especially when rental demand is so
strong that rental income can easily cover the mortgage, maintenance,
and interest—and still leave a solid profit. Moreover, if a renter
defaults, it’s somewhat easier to address than if a homeowner defaults.
Eviction takes an average of thirty to sixty days. Foreclosure takes six
months to a year. Since 2013, single-family-rental-backed securities
have reliably created large sums of credit for the predatory investors
who needed it least, enabling them to extract as liquid funds the
appreciation from their properties. “Their level of risk is very low. It
would take something really cataclysmic to cause a loss,” Jade Rahmani,
one of the first analysts to follow the single-family rental market,
told me last fall. (That something may be Covid-19, which has driven
record-breaking unemployment, a decrease in the share of people able to
pay rent, and rent strikes in some high-cost cities, like New York and
Los Angeles. Commercial real estate securities will fare even worse, and
vulture investors have already raised vast sums of money to snatch up
distressed malls and office buildings.)
The chilling power of Homewreckers is the way in which Glantz shows that
credit is, in the end, all about connections. Remember the arrangement
between OneWest Bank and Colony American Homes? “This line of credit
created a financial revolving door, as Colony bought OneWest’s
foreclosures using a loan from OneWest,” Glantz writes. “By the end of
2014, OneWest’s commitment to Colony had grown to $45 million—more than
all the money it made available to African American and Latino home
buyers over five years.” When those with access to credit fail, they
fail up.
Meanwhile, nearly 10 million Americans were foreclosed on between 2006
and 2014. Some bought more than they could afford. Some were targeted by
predatory products, subprime loans, or reverse mortgages. Others fell
victim to predatory ideas (“There’s been a lot of talk about a real
estate bubble,” Trump told students of Trump University in an audio
recording in October 2006, Glantz notes. “That kind of talk could scare
you off real estate and cut you out of some great opportunities.”)
The Obama administration’s response to the foreclosure crisis was its
greatest failing. It could have mandated principal reduction on
mortgages and reformed bankruptcy law so that it would protect a
person’s primary residence. The government had a chance to convert the
FHA-insured homes that had gone through foreclosure into something that
served the public good, like public housing, or to sell them to
individuals, as with the Home Owners’ Loan Corporation. At the very
least, the government could have wiped clean people’s credit scores,
absolving victims of predatory mortgage products from the accompanying
scarlet letter that compounded their misfortune.
Instead, the administration put forth an insufficient program to modify
mortgages in 2009; it was implemented after those who were dealt the
worst subprime products—many of them black and Latino—had already lost
their houses. The Home Affordable Modification Program set aside $28
billion, meant to aid four million homeowners, but the program was
overly complicated; 70 percent of those who applied were rejected, and
only 1.6 million were assisted, a third of whom defaulted anyway because
the average monthly mortgage reduction was only $500. Meanwhile, banks
frequently claimed to have lost homeowners’ paperwork or wrongly told
homeowners they didn’t qualify, and the Treasury didn’t force banks to
abide by the rules quickly enough. Wall Street was too big to fail (and
executive compensation wasn’t limited, because Treasury Secretary Hank
Paulson feared banks wouldn’t accept government aid if it came with such
a stipulation), but individuals who made poor home investments had their
credit docked for the next ten years.
With wages stagnant since 1971, the nation’s homeownership has hit its
lowest rate in fifty-one years. Renters now outnumber homeowners in
nearly half of all major cities, up from only 21 percent a decade
earlier. Some of those renters sign checks to one of the single-family
rental companies. Though these companies own less than 1 percent of the
rental housing available in the country, they have saturated many of the
country’s most desirable cities. The major single-family rental
companies own 11.3 percent of single-family rental homes in Charlotte,
9.6 percent in Tampa, and 8.4 percent in Atlanta.
The “explosive growth of the single-family rental market has been a
defining characteristic of the housing bust and recovery,” wrote Patrick
Simmons, Fannie Mae’s director of strategic planning. “Starter-home
shortage…appears to be slowing the return of first-time buyers to the
housing market.” So long as competition for housing remains fierce in
these cities, companies have no incentive to invest in their products or
cater to their customers. The Better Business Bureau has received
hundreds of complaints about these companies, and Glantz notes their
higher-than-market rents and rampant maintenance issues. The Atlanta
Federal Reserve found that a third of all Atlanta tenants of Colony
American Homes received eviction notices, and that one of the greatest
predictors of eviction was the percentage of black people in a community.
“The data tell a damning story,” Glantz writes.
During the boom years, IndyMac charged high interest rates (defined by
the government as more than 3 percentage points above prime) to 24
percent of its white borrowers, but 36 percent of Hispanics and 43
percent of African Americans.
This discrimination was repeated at banks across the country. When the
recession hit, people of color saddled with higher interest rates on
their monthly mortgages were more vulnerable to foreclosure. Communities
of color suffered the greatest rates of foreclosure, and now they’re
experiencing the greatest rates of single-family rental saturation and
the greatest rates of ruthless corporate eviction.
5.
Last April I spent several afternoons driving around low-slung
neighborhoods on the outskirts of Los Angeles County, knocking on doors
to see if the stories I had heard about single-family rental companies
were the exception or the norm. These were communities that had been hit
hard during the foreclosure crisis—East Pasadena, Woodland Hills, Van
Nuys—communities that outsiders would seldom have reason to drive
through. Thanks to Meredith Abood, who analyzed Los Angeles County
assessment records while researching the rise of the single-family
rental industry at the Massachusetts Institute of Technology, I had a
spreadsheet with more than four hundred addresses of Invitation Homes
properties, a mere 5 percent of the company’s eight thousand homes in
Southern California and less than half a percent of the company’s 80,000
homes across the United States. I plugged them into my phone at random.
I passed lawns and driveways and the cerulean-white sparkles of pools
flickering through the slats of a fence.
Of the dozen tenants who opened the door, all were people of color save
for a pair of Jehovah’s Witnesses I interrupted one night during prayer.
And almost everyone had had serious trouble with Invitation Homes. (No
one felt safe having his or her name in print, fearing retribution.) A
Latina paralegal told me she called the company every time she submitted
rent to make sure it was received, having once come home to an eviction
notice posted to her door when her rent was in fact sitting unopened in
the Invitation Homes office’s mailbox. After disputing the fees on a
pool that had been broken and drained for months without any response, a
Filipino-American tenant and her foreign husband e-mailed to notify the
company that if they continued to be charged, they would sue. Invitation
Homes employee Chris Warren allegedly told them, “I go to court all the
time, and I always win.” (Warren could not be reached for comment, but
several other tenants shared similar stories.)
A Samoan woman I met who was raising her grandchildren had filled two
journals documenting her home’s roof and plumbing problems, the mold
that blossomed on her walls and ceilings, the endless service calls
she’d made to try to resolve the problems. For the mold on the ceiling
alone, she had had to stay home to receive four different servicemen who
had inspected her roof without fixing it; the fourth explained that the
roof needed to be replaced, but Invitation Homes was only allowing $600
worth of repairs, so he would only be able to patch it. (The other
servicemen, he suspected, had left because they refused to do the work
for that paltry amount.) While living in the home, the Samoan woman’s
husband developed a lung infection and died. Throughout his visitation,
which the woman held in her living room and for which his relatives had
traveled from Fiji to attend, water poured out of a leak that had sprung
from her ceiling into a bucket she’d set on the floor.
The only couple to say they were generally happy with Invitation Homes,
the Jehovah’s Witnesses, also said that they would be moving to Oregon
as soon as their youngest son graduated from high school. They felt that
the management company made repairs easier, and they appreciated being
able to pay online. But they hated the automatic annual rent increases.
The wife had successfully negotiated them down by as much as half, but
even so, their rent went from $1,700 to $2,860 per month over six years.
The company made no improvements, however, and refused to fix the
peeling paint. Just across the street, another Invitation Homes property
was being rented out to a family that had recently immigrated from
Sinaloa. In the driveway, an old gray Honda was stuffed to the roof with
plastic recycling, which they would trade in for nickels and dimes to
put toward their rent.
This is what the recovery from the 2008 crash looks like. People
scrambling to pay rent for decrepit houses, houses that let everyone
cash in except the occupants: the company that bought the home, the
investors that financed that company, the bank that securitized the
home’s debt, the bondholders who bought those securities, and the
speculators who make bets on whether the bonds will pay out or not.
Glantz juxtaposes the investors’ way of life with his own. He knows he’s
been lucky. During the recession, he and his wife bought a foreclosed
home in San Francisco that had previously been owned by hucksters who
were flipping houses among one another to profit from the appreciation.
His parents helped him with the down payment, as did his wife’s parents.
Now he can afford to live in the least affordable place in the country.
Though he doesn’t plan to move anytime soon, he knows that in the event
of an emergency, he could always cash out his home. It’s an insurance
policy that enables him and his wife to work as journalists.
Homewreckers amounts to a sort of middle-class manifesto. To his credit,
Glantz doesn’t just tally inequities and abuses. He also suggests some
solutions. The government needs to “change economic incentives so that
the profits come more easily when [companies] provide home ownership
opportunities to middle-class families,” he writes. This, he notes, has
proven successful with even the most exploitative businessmen in the
past—even Donald Trump’s father, Fred. When the National Housing Act
unleashed lots of credit for the FHA-backed purchase of high-quality
construction, high-quality construction is what Fred Trump produced.
When the government switched to supporting apartment complexes, so too
did Fred Trump. One good thing about amoral money hounds is that they
welcome manipulation so long as there’s money to be made.
There’s no question that the financial system needs resetting.
Unfortunately another financial crisis has arrived first. And what’s
terrifying, as Glantz’s damning book demonstrates, is that the vultures
who exploited the last crisis are dictating the bailout of this one.
1
Savings and loans, or “thrifts,” like the Bailey Bros. Building and Loan
Association featured in It’s a Wonderful Life, are geared to consumers
rather than businesses and by law must have 65 percent of their lending
portfolio tied up in consumer loans. They generally focus on checking
and savings accounts as well as home loans. ↩
2
“A $60 Billion Housing Grab by Wall Street,” March 4, 2020. ↩
3
During this time, the FDIC worked with 8,500 borrowers on loan
modifications—but they could only help the lucky borrowers whose
mortgages hadn’t been carved up into mortgage-backed securities and sold
on the bond market. ↩
4
Colony Capital was in fact the first vulture firm created during the
savings-and-loan crisis. Barrack’s acquisition of American Savings and
Loan turned out to be one of the most expensive bailouts at the time,
costing at least $4.8 billion in government subsidies. He then sold the
bad loans back to their original investors for a $400 million profit. ↩
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