"Wall Street Titans Use Aliases to Foreclose on Families While Partnering With a Federal Agency"
A federal agency tasked with expanding the American dream of home ownership and affordable housing free from discrimination to people of modest means has been quietly moving a chunk of that role to Wall Street since 2002...
...HUD’s demand for confidentiality from all bidders and announcement of winning bids to parties known only as “the winning bidder” deserves its own investigation in terms of obfuscating the public’s right to know and the ability of the press to properly fulfill its function in a free society.
Despite three days of emails and phone calls to HUD officials, they have refused to provide the names of the winning bidders or the firms that teamed as co-bidders with the winning party. Obtaining this information independently has been akin to extracting a painful splinter wearing a blindfold and oven mitts.
That a taxpayer-supported Federal agency conducts a competitive bid program of over $2 billion and then refuses to announce the names of the winning bidders is beyond contempt for the American people. If the Obama administration does not quickly purge this Bush mindset from these Federal agencies, he is inviting a massive backlash in the midterm elections.
Hmmm...I wonder why Obama, Mr. Transparency, and No Insiders...would continue this Bush policy?
The HUD program was benignly called Accelerated Claims Disposition (ACD) and was said to be a pilot program. A pilot program might suggest to those uninformed in the ways of the new Wall Street occupation of America a modest spending outlay; a go slow approach. In this case, from 2002 to 2005, HUD transferred in excess of $2.4 billion of defaulted mortgages insured by its sibling, the FHA, into the hands of Citigroup, Lehman Brothers and Bear Stearns while providing the firms with wide latitude to foreclose, restructure or sell off in bundles to investors...
Let's see...
Who decided that Lehman and Bear Stearns should be allowed to fail? I wonder how much they made off this program? How can one follow the paper or electronic trail when these two no longer exist? Where did the money go?
What about Citigroup? Isn't that a Saudi interest? I wonder how much they made?
What the program effectively did was allow the biggest retail banks in the country to get accelerated payment on their defaulted, FHA-insured, single family mortgage loans while allowing another set of the biggest investment banks to make huge profits in fees for bundling and selling off the loans as securitizations. Once the loans were securitized (sold off to investors) they were no longer the problem of HUD or the Wall Street bankers...
I wonder why anyone would buy those bad loans? Was it a problem with the marketing? Someone didn't label them for what they were? Passing the buck?
It is worth noting what happened to the firms that HUD deemed qualified for this program: Lehman Brothers collapsed on September 15, 2008. Bear Stearns required a weekend rescue by JPMorgan Chase and the Fed on March 16/17, 2008. Citigroup, which got the lions share of the HUD deals, exists today only because of a $45 billion direct infusion from unwilling taxpayers (overruled by their Congress) and hundreds of billions of dollars more in various other government backstop operations – some still undisclosed despite Freedom of Information Act requests and litigation.
Why aren't the books open for inspection?
Why on earth would Citigroup managers be officers of a competitor? I called people in the know on Wall Street. No one had ever heard about it or could offer an explanation. I called Jeffrey Perlowitz’ secretary and sent her an email requesting an explanation from Mr. Perlowitz. Mr. Perlowitz took the same position as HUD: silence.
It’s not like the Federal government didn’t know Citigroup was a serial rogue. Our tax dollars have been used since this Frankenbank was created to investigate serious crimes, while letting the company off with a fine so it could live on to create even bigger problems the next time around. In 2001, Citigroup settled with the Federal Trade Commission for $215 million for predatory lending at one of its divisions. In 2003, Citigroup paid $400 million to U.S. regulators for fraudulent research reports and improper handling of new stock offerings. In 2004, Citigroup paid $2.65 billion to WorldCom stock and bond holders over its role in the demise of the firm. Also in 2004 its private bank was kicked out of Japan for money laundering. In 2005 Citigroup was fined $26 million by Europe’s Financial Services Authority for conducting a trade it internally named “Dr. Evil” that roiled the European bond market. In that same year, it settled with the SEC for $101 million for helping Enron inflate cash flows and under report debt. Also in 2005, it settled a private litigation over its role in the bankruptcy of Enron for $2 billion.
While I was researching this story, a friend forwarded a video clip of Laura Flanders of Grit-TV interviewing the filmmakers of “American Casino,” Andrew and Leslie Cockburn. (Yes, they’re all – Laura included - part of that intrepid Cockburn clan whose spirit resides here at CounterPunch in the form of Alexander Cockburn.) Carefully observe the face of Flanders, the Cockburns and the victims in the film clips. They all muster a brave front but I sense an ever present emotion to hang one’s head and weep for the nation. At one point Flanders asks: “So you think it was all really a scam to transfer money from the vulnerable and the poor to the wealthy? There was no positive interest in home ownership distribution involved?” The answers from the Cockburns go to the heart of this crisis. Both this clip and the movie “American Casino,” playing now in theatres across the U.S., provide a critical foundation for understanding that
while our government and mighty military chased down men in caves in Afghanistan, the ivy league educated enemy within sacked our nation. The film premiered in the U.S. in April, ironically, in Tribeca, just moments away from the real, live American Casino, Citigroup. Watch the interview and clips from the film here:
http://www.americancasinothemovie.com/It sounds like the job rotation between Treasury, Federal Reserve, Wall Street, and Washington.
read more here -
http://www.counterpunch.org/martens10052009.html#Where are the people that represent Main Street?
