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American Casino documents how deregulation stole the American dream

February 5, 2010

The Foreclosure Response screening of American Casino brought a good size crowd to the Celebration Cinema theatre. The film documented how, beginning with deregulation in 1980, predatory lending practices began defrauding Americans of their homes. The American dream became an American nightmare as crooked mortgage loan officers learned they could easily falsifying mortgage applications—without the applicant’s knowledge or consent; bring a totally different loan and payment amount to the closing table than previously discussed; and high pressure folks into trusting and signing on the dotted lines.

In a nut shell, deregulation actually made people losing their homes a profitable venture for investors at the top of the chain. When banks realized the guarantees they sold were going to leave them with gigantic losses, they conned insurance firms, like AIG, into insuring the guarantees. Who bails them out? The same American taxpayers that deregulation screwed over in the first place. The film stated that by the time we are done bailing these giants out from their own failed craps shoot, it will cost every American $42,000.

American Casino documents how large financial firms, like Wells Fargo, specifically targeted minority homeowners. The film profiles a young high school social studies teacher, a middle aged social worker and a minister. All are well educated, good hearted, articulate African Americans—and all were victims of predatory lending. Two end up losing their homes, one remains homeless, sleeping in a friend’s car.

The film also discusses the effects of foreclosures on neighborhoods. Lowered property values cause more foreclosures. As homes stand vacant, meth labs, rats and, in California, disease-carrying mosquitos breed illness, crime and high costs for municipalities.

After the film, panelists Darel Ross, Lighthouse Communities, Inc.; John Smith, Legal Aid of West Michigan; and Tracie Coffman, Home Repair Services fielded audience questions. The discussion started out well but would have fared better had more homeowners asked questions rather than professionals. One query that brought concurrence among the crowd was “Why don’t the mortgage companies share in the devaluation of a home along with the homeowner?”

Of course, the panelists had no answer for this one. While these and other agencies are providing homeowners facing foreclosure with excellent guidance with new federal programs designed to keep folks in their homes, the elephant remains in the room.

People who already lost their homes will never get them back. Another wave of foreclosures is eminent. The investors, who made billions by defrauding millions of Americans, go unpunished and are still making their million dollar bonuses. Few new regulations are being put in place. And, while keeping people in their homes, programs to help homeowners don’t give a cent to homeowners stuck with sub-prime mortgages. They only adjust the mortgages so the people can pay a little less interest or take longer paying them off.

Foreclosure Response is tackling the job of working with city and state governments to implement measures that will help Michigan neighborhoods overcome blight and reduced property values. They are also enlisting neighbors to join the Eyes Wide Open Vacant Building Watch. Other opportunities for action will be posted on in the coming months.

One Comment leave one →
  1. Sue Kornoely permalink
    February 6, 2010 2:31 am

    Great article. Enjoyed the movie and the article does a great job of summarizing it.

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