The country’s first black president contributed to a significant disintegration of wealth for people of color.

I was in St. Louis, giving a talk for a book I wrote about the foreclosure crisis. The skies erupted minutes before the event, and few battled the rainstorm to join the audience. But when I opened it up for questions, Andy Williams Jr., dreadlocks scraping his shoulders, stood up and said, “David, you are a hard man to find.” Williams drove five hours that day, from Chicago to St. Louis, to tell me about his 11-year foreclosure ordeal, initiated, he claimed, after his loan servicer misapplied his payments, charged illegal fees, and fraudulently placed him into homeowner’s insurance when he already had it.
A paralegal, Andy started collecting stories of the servicer’s tactics, compiling them into an as-yet-unpublished 200-page book. He not only fought his own case—it’s still in federal court—but he helped grow six law firms in the Chicago area, to protect others at risk of dispossession. It’s an uphill battle. “I just don’t think a borrower will ever have a real chance of justice or leveling the playing field,” Andy told me last week.
Should Andy exhaust his appeals, he’d join over 9.3 million American families who have lost their properties since the housing bubble collapsed, either to foreclosure or an associated transaction. Given the average household size in the United States, that likely represents more than 20 million people, forced to uproot their lives and find shelter. This had a particularly gruesome effect on people of color, who stored more of their wealth in home equity and were targeted for subprime loans. Coates points out that white households now hold seven times as much wealth as black households; he doesn’t mention how that statistic grew worse under President Obama, mostly because of foreclosures. Former Representative Brad Miller calls the crisis “an extinction event” for the black and Latino middle class.
If Obama ever reads this critique, I suspect he’d mutter under his breath, as he disclosed to Coates he does habitually when confronted with activist demands. “Where I got frustrated at times was the belief that the president can do anything if he just decides he wants to do it,” Obama grumbles.
Nothing is sadder than a man who disclaims his power to preserve his reputation. The presidency is subject to countless veto points and constraints, but the foreclosure disaster was unique; Congress had already given the incoming president the authority to act.
Obama the candidate ran on allowing bankruptcy judges to cut balances on primary mortgages; Obama’s administration actively whipped against the policy. Obama’s transition team earmarked up to $100 billion in funds appropriated through Bush’s bank bailout to mitigate foreclosures; eight years later only around $21 billion has been spent. Obama the president promised 4 million mortgage modifications; to date less than a million have been successfully achieved.
No Republican sign-off was necessary for Obama’s Home Affordable Modification Program (HAMP). The Treasury Department alone decided to run it through mortgage companies that had financial incentives to foreclose rather than modify loans. Treasury never saw the program as a relief vehicle, but a way to “foam the runway” for the banks, allowing them to absorb inevitable foreclosures more slowly. Homeowners were the foam being crushed by a jumbo jet in that scenario, squeezed for as many payments as possible before ultimately losing their homes.
But Obama’s Justice Department did not use this newfound leverage to obtain equitable solutions for struggling families. It didn’t prosecute those responsible for fraud. It reached a series of bank settlements that provided little meaningful relief. Fraudulent documents still get used in foreclosures today. And of course, no high-ranking executive saw the inside of a jail cell.
Coates cites the Shirley Sherrod fiasco as a “rare act of cowardice” for Obama. But Rick Santelli’s rant about “the losers’ mortgages,” which Coates also highlights, paralyzed the White House from aiding anyone other than “responsible borrowers,” an echo of Obama’s constant haranguing of irresponsible black fathers. The president never sliced up “responsible” and “irresponsible” banks in this fashion; instead, Wall Street’s balance sheets were privileged ahead of homeowners’. This decision didn’t just abandon millions in a time of need, it stunted the recovery, squandering Obama’s political capital rather than conserving it.
But it’s worse than that. This past year has made clear that America’s social fabric is fragile. When you let private companies distort a government program into a foreclosure-creating machine, when you allow the largest consumer fraud in American history to occur without sanction, you tear at that social fabric. You create a rot at the heart of American democracy. You teach the public the rules don’t apply to the wealthy and powerful. And people respond with cynicism and rage. Coates squarely blames racism for the rise of Trump. But the destruction of faith in institutions also plowed that pathway. Obama sapped that faith when he could have restored it. And now his party, the one that believes government can act to protect its citizens, is at its lowest ebb in 90 years.
Andy Williams Jr. is as emblematic of the Chicago black political tradition as Barack Obama. He reflects the community organizing impulse, focusing on “delivering justice on behalf of the African American community,” to use Obama’s words. But Andy needed a president to help him achieve that justice. His president never answered that call.
Filed under: foreclosure | Tagged: Obama Foreclosure, The Atlantic |
Vegancow has a good point. But, we have to fight it. Can someone here start a petition — nationwide – to get to Trump?? I am willing to speak but not good at getting petitions.
Andy Williams Jr. I am interested in the stories for your book. I’m
Doing the same and I live outside Chicago. If you are reading would you please contact me r22sxott@yahoo.com. I won local foreclosure representing myself. But it has not accomplished justice on all the wrongdoing the banks have done. Wow I didn’t realize the foreclosure number now stands 9.3 million. I want to help expose the EPIC FAILURE and cause the billionaires to go to jail. I’ve got evidence too. Let’s come together and join forces
Obama succeeded brilliantly in his true objective of weakening America and her people so that they would accept a totalitarian state. His strategy was divide and conquer , and now we have the fruits of his labor.. race relations worse than at any time in my lifetime , 20%+ unemployment and zero economic growth for all his 8 years in office.
Obama gave too much importance to Obamacare, globalization and climate change, probably, giving less importance to housing crisis for the poor and middle class, racial harmony and cyber security.
Hope the new administration would realize that people do need home before America could be called great again.
Reblogged this on Deadly Clear and commented:
This has been my contention before the HAMP scam was even a Geithner/Obama wet dream. http://wp.me/p1H9BR-yK
Obama had the largest super pac since the start of super pacs. All funded by the banks. They put him in office and turning a blind eye was what it took for the first black person to hold office. His hands were tied from day one or the banks would of killed him.. It’s not all black and white, But bank and white.
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Obama did not fail!!!! Wake up America!!!! It’s all already planed ahead of time. We no longer have a United States, The so called US government operates as the USA Corp. There is no president with leeway to actually do something designed to recapture America from the grips of the banking cartel known as the Federal Reserve. What’s up dear fellow Americans, we are sleeping and agree to give away our powers to other and do not have them be accounatble for their robbing us all from our liberties. This your responsibility and nobody else to do so.
RIGHT ON POINT.