Sanders Proposes “Reparations” to Homeowners

see A direct rebuke to the uneven bailout given to the banks in 2008-2009

Part of the reason that Bernie Sanders caught the “establishment” politicians by surprise in 2016 was that none of them understood the outrage that is still felt today. Trump was clearly the beneficiary of this outrage. This is not a general outrage. It is very specific. Around 35 million people were displaced as a result of antics and criminal enterprises run by Wall Street investment banks. Many died from suicide or stress related disorders. Millions  more lost jobs, status and livelihoods from the loss of capital from our capitalist society. If it was intentional then it was manslaughter or murder — and all indications are that it was intentional.

The fix is obvious — put the capital back into our system. Wall Street hates this idea and calls it radical and anti-capitalist; but in reality nothing could be more capitalist than reinstating free market forces and restoring stolen capital from our society. If you steal something you should, at a minimum, be required to give it back. That’s not socialism. It is criminal law.

The complexity of the scheme masquerading as “securitization” and its illegality has made it a challenge to put it into words and use those words to defend American homeowners from illegal foreclosures. Most people failed either because they didn’t try, or they couldn’t persist.

A lot of people know they got screwed by the investment banks. They just don’t understand exactly how it was done. But they know. And young and old they are very angry about it because the government did nothing to balance the playing field. In the end the common man or woman continues to be regarded by many political leaders as food for the grand scheme of things.

The Sanders proposal is both fair and reasonable and necessary to reinstate capitalism at is finest — i.e., with truly free market forces at play instead of controlled market forces. The current imbalance is closer to fascism than capitalism.

Only the government is in a position to master the Wall Street scheme and correct it. And the resulting clawback of money from those investment banks will more than pay for the the only correction that will make things right. Iceland did it at the beginning and rebounded from recession in a matter of months. The U.S. recession endures for most people — while corporate and bank profits create the illusion that the economy is expanding faster than the facts on main street.

Here is the simple truth:

  1. The law — in all fifty states and territories of the U.S. requires that only a claimant who has paid value for the debt can initiate foreclosure proceedings.
  2. This simple law has been violated in virtually all foreclosures for the past 20 years.
  3. Wall Street investment banks created a huge marketing and sales infrastructure that generated false demand for loans, and artificially inflated home prices far above their actual values using false appraisals. They did this so they could successfully bet on a crash of prices.
  4. Homeowners were instantly enrolled into a very complex deal, most of which they knew nothing about. Investors put up money for a deal they knew nothing about. This happened because disclosure laws were not enforced.
  5. Both investors and homeowners, the only two real players in loans, were tricked into being part of a much larger undisclosed scheme resulting in huge losses to investors and homeowners.
  6. Many investors had the resources to bring claims and have now settled.
  7. Only 2% of distressed homeowners were allowed to prevail in court. The rest are lingering in recession, depression or worse.
  8. Wall Street investment banks did this for one single reason — to convert normal debt financing directly into revenue that vastly exceeded the amount of each loan. Such revenue was not labeled or treated as sale of the debt but the amounts received made repayment irrelevant except to maintain the illusion of value for derivatives that were sold as part of the scheme.
  9. The various bailouts in 2008-2020 did nothing to balance the free market system and instead institutionalized the criminal enterprise of the banks.
  10. We can’t fix the system unless we admit that the system isn’t working as intended. If we do admit it the solution is obvious — relief and reimbursement to the tens of millions of homeowners who were cheated by this scheme and a change in laws that requires the complete and full disclosure to investors and borrowers before anyone can claim to be collecting a debt.

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.

While many of Sanders proposals are forward looking, that commission purports to be a functional do-over of the inadequate bailout efforts in the wake of the 2008 housing crisis.

12 Responses

  1. clarencespence, – doesn’t matter. I don’t support Socialism. But the problem is that we don’t have capitalism in the way it should be. And we don’t have socialism – as it should not be.

    What we have is what we simply call “fraud.” .

    How do you fix it? With socialism or capitalism? I think the answer is neither. But, rather, just outright exposure. And we are not there yet. Once exposed -capitalism will survive. But not without exposure of fraud. Capitalism cannot survive with fraud.

    Bernie has points as to the fraud, but the solution is NOT socialism. The solution is exposure of the fraud. Bernie just in wrong place to expose. Get the facts first Bernie — will make you more credible. Don’t attack the fundamentals of a strong nation. Get the facts. Expose them. You will have done your job then.

    I don’t see it yet. He has no answers for fraud. Weak position.

    Thanks!!

  2. Let me guess – Sanders wants to get millions of dollars (90% of which will go to the banker’s various strawmen with 10% going to screwed homeowners) as supposed reparations for trillions stolen by the banksters. If he’s talking actual reparation numbers – he better be talking trillions – or, he’s simply another politician apologist for the banksters.

  3. Do the math, Summer. 70 million — on average of $200K per loan — economic collapse. THAT is why we get nowhere.

  4. Still no reason to vote for that Communist!

  5. Mark Stephens — the problem is that the government “settled” with the investment banks.

  6. The problem with Bernie’s plan is that he wants the government, i.e. taxpayers, to pay the reparations. The money should come from the investment banks.

  7. Here are MORE than 35 MILLION defrauded by banks and judges

    Plus at least 35 million of defrauded BUYERS of stolen properties who have NO property rights

    Banks and Courts cannot deceive forever that foreclosures are legitimate purchase for a new buyer

    So, total 70 million

    If everyone will write at least ONE letter to SEC, DOJ, ext – they cannot ignore us.

    JUDGES must pay, too. .These are Judges who kicked people of the streets, not banks

    They could stop it from the beginning. Judges did not follow the law and this is mostly Judicial liability.

  8. Great post! Share before it’s too late. The commission will undoubtedly lead to crines including crimes in the settlement, court based cover up. Trump has his followers believing he’s going to do a magic universal debt forgiveness while stuffing his and Wall Street billionaire pockets.

  9. Java
    So…. Who else has proposed ANYTHING like Bernie has? What would the country look like if those of us that were defrauded were made whole again? (Not just to have credit again!)
    This is the first I have heard anyone even begin to address the fraud, and theft against us that is in the political mainstream.
    Thank you Neil for pointing out the obvious so many times. Thank you for making a statement to the facts of this matter.
    Java… I am sorry for your loss. Welcome to the tribe of 35 million.
    However, maybe support of Bernie’s promise would have the traction we desire to address the fraud. Until the fraud and theft is disclosed and addressed, there will be no real remedy to our plight. I lost everything, (like many more of U.S.), that I had worked for in my 50 year working career…. It would more accurately be called “Life Theft”. Because of dear friends and family, I am not on the street. Others have not been so lucky. Just look at the number of homeless and “rent” enslaved today… Many of those that managed to not drown in their loss, are now paying rents in excess of the mortgage they had.
    Solutions? My Suck-cess in the courts seems to be the outcome for most of us. Rather a stinky outcome…Non- disclosure agreements, and fraudsters buying off litigants does not help our cause. Do non-disclosure agreements protect fraud? (That would be a test I would like to see) …Even showing judges the fraud (As in my case) usually makes no difference. The justice in outcomes do not line up with the reality of the circumstances. The INTENT of law was to be fair and unbiased, not to benefit the wealthy or slick attorneys ability to bend law to their benefit. Holding our judiciary to account is the first step in mending this severed artery. A question that never seems to enter this discussion is…. Who writes the laws, and who benefits? (You only get one guess) Share it here….
    Any ideas? Together, in action there is hope. Please do not excuse the long diatribe. Tell me your thoughts.

  10. At least someone is still speaking up. Foreclosureweb — the crooks should pay. Return every dime.

  11. Really Bernie? And just who is paying yet again for that program?

  12. I wish I could believe Bernie. Wells Fargo will owe me over $100k in lost equity !!!! But unfortunately I don’t believe him as far as I could throw his fat wife.

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