Mortgages in the Era of Mass Terror
Terrorism is a tricky act to define, particularly when household appliances have become weapons of mass destruction. Earlier in April, as the National Guard and Boston Police scoured the city’s suburbs in search of two men believed to have planted the fatal marathon bombs, another story of violence and mass insecurity surfaced.
As the New York Times reported, “The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that many thought were gone for good.”
In other words, the well-heeled boys are back in town, peddling predatory mortgages to be bundled and sold on Wall Street. Even the Times, generally bullish on business, struck a cautionary tone. “The revival also underscores how these investments, known as structured financial products, have largely escaped new regulations that were supposed to prevent a repeat of the last financial crisis.”
Warnings of a repeat of the last financial crisis — printed on the front page of the New York Times?
Yet, unlike the 24-7 coverage of Boston, the national response to the threat of economic mass destruction has been muted. That’s because almost no one openly discusses the ongoing foreclosure crisis in terms of domestic terrorism. But that’s exactly what it is, and we must recognize this if we want to prevent banks from causing more damage.
The Department of Homeland Security has the most comprehensive definition of terrorism , which explains that these acts must fulfill the following criteria.
The term “terrorism” means any activity that—
(A) involves an act that—
(i) is dangerous to human life or potentially destructive of critical infrastructure or key resources; and
(ii) is a violation of the criminal laws of the United States or of any State or other subdivision of the United States; and
(B) appears to be intended—
(i) to intimidate or coerce a civilian population;
(ii) to influence the policy of a government by intimidation or coercion; or
(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping.
If you ask Helen James, a Chicago woman who has lived both on the streets and in shelters, being without a house in the U.S. is clearly dangerous to human life. When we spoke last summer she talked of untreated hemorrhoids and sleeping on benches during freezing Chicago winters. “I just don’t want to die,” she said.
According to the National Coalition for the Homeless, 700 people without addresses die each year from hypothermia alone.
More Americans have frozen to death since the economic crisis began than have died in all terrorism attacks on U.S. soil in the last two decades—September 11th, included.
As for the question of legality, Griggs Wimbley, a resident of small town North Carolina, is an expert on how the wave of recent foreclosures were in violation of U.S. criminal laws. He spent the better part of a decade investigating and fighting his own fraudulent foreclosure. “I’ve seen nothing but cheating,” he said. He called Wall Street’s reign throughout 2000s “a ten-year crime spree.”
The hundreds of investigations and lawsuits over lending fraud, forgery (remember that robo-signing scandal?) and servicing regulations back up Wimbley’s own experiences. And that’s not to even mention the industry’s widespread violation of the Fair Housing Act and other laws intended to prevent race-based housing discrimination, which was rampant in the lead-up to the financial crisis.
Lastly, Marcella Robinson and Nicole Shelton, co-founders of the grassroots homeowner group, Mortgage Fraud NC, can attest that the entire point of evictions is to produce widespread fear among civilians. Robinson, whose home was in foreclosure when we spoke, told me that she slept with a baseball bat at her bedside for the sense of security. Shelton, who had already been evicted from her home, said she was living in “a constant state of fear.”
Why would Wall Street intend to intimidate millions of civilians? The rationale is that if people aren’t terrified of being thrown out of their homes, they won’t continue to repay the astronomical debts that are apparently the only thing keeping our economy afloat.
This argument has indeed influenced the policy of the U.S. government. Ed DeMarco, the head of the Federal Housing Finance Agency has been one of the most vehement opponents of homeowner relief, warning that the government must wield the specter of eviction or everyone will decide to default on their mortgages. As for the issue of “affect[ing] the conduct of a government by mass destruction, assassination, or kidnapping,” bankers don’t need to resort to kidnappings; they’ve already taken the global economy hostage.
Since 2007, Wall Street has evicted four million families — approximately ten million people — from their homes. Millions more are ensnared in ongoing foreclosures. Over the last year, I’ve listened to the stories of hundreds of these families, and the most common experience I’ve heard is the feeling of insecurity and psychological terror.
Loss of security. State of fear. These are the same words, the same phrases that we are hearing people in Boston express. If mass insecurity and terror of default were what the banks wanted: it’s mission accomplished. Yet, the banks aren’t accused of terrorism. Nor are their financial products classified as WMDs.
Perhaps you’re thinking that Wall Street isn’t accused because terrorists must use bombs rather than bonds, because there’s no such thing as economic terrorism, is there? The Pentagon certainly believed so, when in 2011 it issued a report positing that some unknown parties may have helped pushed the United States into the 2008 economic crisis through “financial terrorism.” It’s no surprise that the report’s suspects included Islamic jihadists, the Chinese and Venezuela rather than AIG or Goldman Sachs.
That same year, American union organizer Steven Lerner himself became brand an economic terrorist when he suggested that homeowners band together for a mortgage strike. Conservative media called it an “ECONOMIC TERRORISM PLAYBOOK” (yes, in all caps), while a Utah congressman urged Attorney General Eric Holder to investigate these threats because they “clearly constitute domestic terrorism.”
In other words, advocating for homeowner security amounts to acts of terrorism, while ensuring Wall Street’s stability — even if that means kicking people out of their homes and blaming Venezuela for the mortgage meltdown — is simply U.S. policy.
The place that most clearly demonstrates this double standard is Detroit, where Michigan’s governor recently imposed a state of martial economics — a suspension of democracy to ensure financial security. With an emergency financial manager single-handedly running a city of more than 700,000 people, Michigan shows that today’s underlying security question isn’t physical. It’s financial.
As local pastor Reverend David Bullock explained, “It’s no longer ’68 and ’69 — the hot riot summers. [The rich] are no longer worried about physical security. They are worried about their money.”
That fact that the nation is experiencing widespread financial terrorism does not in any way make the attacks in Boston any less tragic. But it should make us angrier that Wall Street bankers are busy reviving the same weapons it unleashed on the nation only a few years earlier — and that our government is doing nothing to stop them.
Laura Gottesdiener is a freelance journalist in New York City. She has written for Ms. The Huffington Post, the Arizona Republic, the New Haven Advocate, AlterNet, and Waging Nonviolence (wagingnonviolence.org), where she is an associate editor. She won the John Hersey Prize at Yale University for a body of journalistic work and was a national finalist for the Norman Mailer Nonfiction Award for her 2009 investigation of girls’ wrestling. She was actively involved in the Occupy movement and lived in Zuccotti Park from early October 2011 until the police raid in mid-November 2011. A Dream Foreclosed is her first book.
Some material in this article is excerpted from A Dream Foreclosed: Black America and the Fight for a Place to Call Home, forthcoming from Zuccotti Park Press.