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Bernie Sanders Proposes Reparations - for Defrauded Homeowners
ALEXANDER SAMMON - SEPTEMBER 19, 2019
Excerpts
His Housing for All plan includes a commission to study and grant relief to victims of fraud and abuse in the aftermath of the foreclosure crisis.
Perhaps the most interesting and novel proposal in the Sanders housing platform comes in its final bullet point. There, Sanders proposes to create “a commission to establish a financial relief program to the victims of predatory lending, mortgage fraud, redlining and those who are still underwater on their mortgages as a result of the 2008 Wall Street crash. This program shall include down payment assistance, mortgage relief, or rental assistance.” That relief, Sanders insists, must go to homeowners, not the Wall Street firms that put them in this position.
The commission, too, would pay out, in the form of rental or down payment assistance, and funds to those who saw their houses foreclosed on illegitimately or were otherwise victimized by the crash. The inclusion of that demographic is important, because of its inordinate impact of communities of color, who were hit hardest by the foreclosure crisis.
There were particularly flagrant examples of this. Former Wells Fargo employees at one point testified that they’d deliberately tricked middle-class black families (who they called “mud people”) into subprime “ghetto loans,” a cruel twist on the redlining policies that banks have long been used to exclude racial minorities from access to home loans. Because home ownership makes up a much larger percentage of black and Latino wealth than it does white wealth, that foreclosure wave vaporized wealth from people of color in a way that never recovered. As Matt Breunig and Ryan Cooper noted in Jacobin, it took until 2016 for black wealth to return to 2007 levels, but the average black home equity has remained over $16,000 lower. An ACLU report stated that by 2031, for black households, wealth will be 40 percent lower than if the recession hadn’t taken place, leaving black families about $98,000 poorer.
https://prospect.org/article/bernie-sanders-proposes-reparations-defrauded-homeowners
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