Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans
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With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans
1:26 AM 09/03/2012
President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.
As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.
The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney.
[RELATED: Learn about the 186 class action plaintiffs]
Since the mortgage bubble burst, some of his former clients are calling for a policy reversal.
“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”
Banks “were too eager to lend to many who didn’t qualify,” said Don Byas, another client who saw banks lurch from caution to bubble-inflating recklessness.
[RELATED: Obama's Citibank plaintiffs hit hard when housing bubble burst]
“I don’t care what race you are. … You need to keep financial wisdom [separate] from trying to help your people,” said Byas, an autoworker.
Nonetheless, Obama has pursued the same top-down mortgage lending policies in the White House.
Obama’s lawsuit was one element of a national “anti-redlining” campaign led by Chicago’s progressive groups, who argued that banks unfairly refused to lend money to people living within so-called “redlines” around African-American communities. The campaign was powered by progressives’ moral claim that their expertise could boost home ownership among the United States’ most disadvantaged minority, African-Americans.
[RELATED: Obama's African-American clients got coupons, not cash]
Progressive activists’ ambition instead contributed greatly to a housing bubble that burst in 2007, crashed the nation’s economy in 2008, wiped out at least $4 trillion in equity, kept unemployment above 8 percent for four years, and damaged the intended beneficiaries of looser mortgage lending standards.
In the White House, Obama has continued to intensify regulatory pressure on banks to provide more risky loans to African-Americans and Latinos. He has used lawsuits to fund his allies. And taxpayers are now unwittingly contributing to a re-inflation of housing prices.
Meanwhile, the president has blamed the housing bubble on supposed GOP deregulation, even though President George W. Bush expanded the regulation-expanding, anti-redlining policies established by progressives during Bill Clinton’s presidency.
“Governor Romney’s plan would… roll back regulations on big banks,” Obama says of his Republican challenger Mitt Romney in a 2012 TV ad titled “The Choice.”
“But you know what? We tried that top-down approach. It’s what caused the mess in the first place.”
The Lawsuit
Fay Clayton, a Chicago progressive activist, initiated the discrimination lawsuit in 1994. Obama’s employer, a lawyer named Judson Miner, allied with Clayton to file a class-action lawsuit a year later.
Obama appeared at Clayton’s office “saying he was the new associate on the case,” Clayton said in a statement to The Daily Caller. “I remember Barack arriving — he was industrious, he enjoyed the work, he was clearly smart and dedicated.”
The suit named three African-American plaintiffs, but later added 183 whom Citibank or its subsidiaries had allegedly rejected for mortgages in 1993 and 1994.
Some of the plaintiffs told TheDC about their rejections by Citibank.
Citibank’s lending agent “told me that I needed to put thousands of dollars down [to increase equity]… I was so upset at that, I said ‘’Do I look like I have ‘stupid’ on my forehead?’” said Maudestine McLeary.
Byas said he had a Citibank mortgage on his property in Austin, a West Side Chicago neighborhood, but was rejected when he sought a mortgage to buy a house in the troubled Maywood district.
“Chicago had been redlining people for years and years … [and] you knew this kind of crap happened,” said Dale Freeman, an operations manager at the Federal Reserve Bank of Chicago. He quickly got a loan from another bank to buy a house in the wealthy South Side neighborhood of Hyde Park, where he and his family still live.
Citibank defended the cautious way it loaned out its shareholders’ money, saying that “the underwriting criteria were racially neutral on their face … [and] that each of the named defendants was denied the home loans he or she requested due to his or her lack of financial qualifications,” according to a June 1995 summary by the judge who heard Obama’s discrimination case.
Citibank had a significant amount of data to back up its case.
For example, when the 186 clients submitted their names for compensation in 1998, it turned out that least 19 had bankrupted or received foreclosure notices even before December 1997. Another 18 of the 186 clients would go under within three years because of financial pressures.
[RELATED: Plaintiffs in 1995 Obama-led Citibank lawsuit submitted class action claims
Yet Citibank settled the case in December 1997.
That settlement came as Citibank’s top executives sat down with leading progressives in Bill Clinton’s government to bargain for their future. Their future was at stake because of a successful campaign by Obama’s allies in Chicago.
Their “anti-redlining” political campaign began in the 1960s, when new federal housing laws and federal financing laws helped African Americans in overcrowded city blocks buy houses in Chicago’s white, middle-class neighborhoods.
This resulting migration accelerated white flight to the suburbs and was dubbed “block-busting.” That’s because many previously white neighborhoods transformed into all-black neighborhoods, and many later suffered from blight once buyers proved unable to pay their mortgages.
Yet the Chicago housing activists sought to shield their own neighborhoods --- such as Austin and Oak Park --- by pressuring banks to fund many more mortgages inside the so-called redlines that marked African-American neighborhoods.
The anti-redlining campaign scored repeated courtroom victories, and also drove Congress to pass the Community Reinvestment Act in 1977.
Congress repeatedly expanded the law, and in combination with a 1994 “Joint Statement” by Clinton’s regulators, effectively gave progressives in government the power to paralyze -- and atrophy -- any bank’s business if it did not increase mortgages inside the redlines.
Citibank felt that power in April 1998, when it sought federal approval for a merger with Travelers Group. It only got approval from the Clinton administration progressives after it promised in May to provide $115 billion for anti-redlining loans.
Executives at numerous other merging banks were also submitting to the progressives’ top-down terms. Their anti-redlining promises added up to $600 billion between 1993 and 1998, according to a 2000 Treasury Department report.
Before striking its deal with the federal government progressives, Citibank got rid of the Chicago lawsuit by paying off the Chicago lawyers.
While the settlement provided $950,000 for the lawyers, it provided $20,000 for each of the three named plaintiffs, and $360,000 in benefits to be divided among the 183 other clients.
Obama’s Role
The Chicago Sun-Times reported in 1998 that Obama claimed $23,000 in billable hours for his role in the lawsuit. That role was limited, partly because he was networking his way toward his 1996 election to the Illinois Senate. But he stayed with the firm until 2004, and it was his lawsuit.
Obama also won massive campaign donations from the mortgage industry, including at least $126,349 between 1989 and 2004.
He sought public credit for the lawsuit: His employer submitted a docket to the court that listed him as the lead attorney for two of the three named plaintiffs in the case. The docket bound Obama’s name to the lawsuit -- and to the 186 clients who would soon follow.
Obama also used his courtroom work to win a keynote speaking slot at an important conference of Chicago housing groups in 1996. Friends said “‘he’s really thoughtful, [and] he’s done some work as an attorney in these communities,’” Joel Bookman, director of programs for the influential Local Initiatives Support Corporation, which organized the event, told TheDC.
Obama endorsed the national subprime policy, telling a Wall Street audience in September 2007 that “subprime lending started off as a good idea: Helping Americans buy homes who couldn’t previously afford to.”
But by then, the disastrous impact of the top-down subprime policy was obvious, so Obama so tried to push the blame on the banks. “They began to lower their standards. … Most everyone knew that some of these deals were just too good to be true,” he told his Wall Street audience, “but all that money flowing in made it tempting to look the other way.”
The Downsides
To meet their anti-redlining promises, executives ditched their caution. Street-level officers soon began offering loans to people with little chance of repaying, including many of Obama’s eventual clients.
Banks were “financing people who had no jobs. … [T]he pendulum swung the other way,” Renee Brooks, an accountant and one of the three named plaintiffs, told TheDC.
“They didn’t check out certain people, and they got loans and they couldn’t afford them in the first place,” Juanita Malone, another Obama client, told TheDC. “I think that really was, to me … not professional.”
In the late 1990s “money became available to everybody … everybody and their brother-in-law,” said Freeman. “Individuals who get money easily and who don’t have a good background and or a good education would expect to suffer the consequences.”
Their judgment is shared by Mark Zandi, an Obama supporter and the chief economist at Moody’s Analytics. “Too-easy credit and millions of bad loans made during the U.S. housing crisis paved the way for the financial calamity and [the] Great Recession that followed,” he wrote in an Aug. 25 column for the Washington Post.
Bank standards fell so fast that by 2006, Citigroup and other banks were offering favorable mortgages to many legal and illegal immigrants who did not have assets or stable incomes – and with the full support of “compassionate conservative” President George W. Bush.
Another downside was that the extra money inflated house prices.
Buyers used their easy mortgages to bid against each other for nice houses, and the resulting property bubble ensured that many African-Americans — and by 2007, many Hispanics in the Southwest — faced unaffordable monthly payments.
“When they made the loan, they were able to take care of it,” said Samuel Wilson, who owns a hardware store in Chicago’s Englewood district. “But work began to slow down and they weren’t able to keep up.”
Even before the 2007 crisis, at least 48 of Obama’s 186 African-American clients bankrupted or received foreclosure notices.
Another giant downside became visible in 2008, when Wall Street crashed because many of those risky mortgages were being used as collateral for high-tech, high-profit stock trades.
The banks had sold the mortgages to Wall Street because they exist to earn profits for their shareholders — not to store risky mortgages for progressives.
Once the economy slowed in 2007, the risky mortgages began foreclosing. Stock prices quickly tumbled, confidence cracked and prestigious Wall Street companies collapsed.
The stalled economy was exacerbated by the Wall Street crash, and by July 2012, Obama’s 186 clients had received at least 188 bankruptcy and foreclosure notices.
Obama’s Clients
The Daily Caller obtained the previously unpublished records for all of Obama’s 186 clients after reporting on Obama’s pioneering Chicago role in the national real estate bubble.
TheDC verified the real estate history of all clients using public databases provided by the Cook County Recorder of Deeds, the Cook County Assessor’s Office, the Illinois bankruptcy court, the federal court system and Zillow, a real estate firm.
TheDC talked with 18 of Obama’s former clients but was rebuffed by several others, including lead plaintiff Selma Buycks. After the case, she bankrupted twice and received a foreclosure notice in 2008.
None of the 186 clients, except for Buycks, knew that Obama was marked as a lead lawyer in their class-action case. Some joined the lawsuit while it was in court, others joined once they were notified of their eligibility after the settlement was signed.
The lawyers who brought the suit did not express any interest in the plaintiffs’ subsequent financial circumstances. Clayton and Miner said they had not been in contact with them. TheDC’s emails to the White House were not answered.
The banks’ post-lawsuit loans to the plaintiffs were “absolutely not counterproductive — each of these loans… was a good loan,” Fay Clayton told TheDC. “These were people the banks should have been courting in the first place,” she insisted.
Bankruptcies
At least 46 of Obama’s 186 clients have declared bankruptcy since 1996, often multiple times.
That’s a far higher bankruptcy rate than the rate for all Americans, for Chicagoans and even for African-Americans in Chicago.
In a 2011 report, the left-of-center Woodstock Institute reported that just 4.25 percent of African-Americans living in Chicago’s mostly black neighborhoods went bankrupt between 2006 and 2010.
By contrast, 11 of Obama’s 186 clients — or 6.6 percent — went bankrupt during the same five-year period.
That bankruptcy is 50 percent higher than the rate among Cook County’s African-American population, and almost three times the bankruptcy rate of all Cook county residents, according to data in the Woodstock report, titled “Bridging the Gap II.”
Foreclosures
At least 55 of Obama’s 186 clients received foreclosure notices after 1998 — many of them multiple times. Foreclosures were finalized for at least 39 homeowners, or 20 percent.
That’s at least 20 times the rate at which prime loans foreclose over their lifetimes, and roughly three times the lifetime foreclosure rate of subprime loans.
Ten more of the 55 foreclosures are in process according to PACER, the federal government’s judicial records database.
The number of foreclosures may be near 70. That’s because the court database shows foreclosures by 16 people who share full names with his clients, including Donald Young and James E. Jones.
The clients’ foreclosure rate was far higher than that of other homeowners. In 2009, for example, at least seven of Obama’s former clients got foreclosure notices. That’s roughly twice the rate of completed 2009 foreclosures in Chicago’s minority neighborhoods, according to a 2010 report by the left-wing housing activist group National People’s Action.
That 2009 rate is also roughly eight times the nation’s post-bubble foreclosure rate of 0.5 percent per year, according to a report by the government’s Federal Deposit Insurance Corp.
2009 wasn’t an aberration: Obama’s client list had averaged 5.3 foreclosure notices a year during the 1990s.
The foreclosures temporarily halted in 2010, but are expected to accelerate following a 2012 federal government deal with several major banks.
Nationwide, another 5 million home owners are expected to get new notices between 2012 and the end of 2015, according to Moody Analytics. In May, 1.5 million homes were 90 days or more behind in payments.
More of Obama’s clients likely will be on that list.
“[I have] been paying the mortgage with no problems since 1969, until about [the] last two months, when I had taken ill and wasn’t able to work and take care of the business,” Samuel Wilson told TheDC. He’s also behind on his state taxes, he said. Wilson runs a hardware shop and a laundromat and also rents apartments, but his Englewood neighborhood is poor and crime-wracked, he said.
Homeownership Rates
There were 186 client-enrollees in Obama’s class-action lawsuit. Of those, at least 88 got foreclosure notices or went bankrupt.
As few as 19 of the 98 remaining clients own homes today.
City records show that 29 of the 98 do not hold mortgages, and at least four are deceased. As many as 16 may have foreclosure records.
The progressives’ anti-redlining claims were intended to boost African-Americans’ rates of homeownership. But by 2011, the rate had dropped 2 points below the 1990 level of 45.2 percent.
Moreover, TheDC’s count of 19 homeowners among Obama’s 186 clients may be too large. That’s because the lawsuit included people who bought houses years earlier.
Marcella and Arthur Wilson, a U.S. Marshall who was one of Princeton University’s first African-American graduates, used a Citibank mortgage to buy a house in 1954 for $17,500.
Other clients said they never had problems getting housing loans.
Citibank “didn’t turn me down,” said John Geoghegan, a 68-year-old retiree who expects to pay off his mortgage in several years. “I really have never been turned down for a loan.”
Impoverishment
The current value of many clients’ houses is far below their bubble-inflated mortgage loans.
TheDC compared Cook County’s mortgage data with Zillow’s real estate assessments and concluded that 31 of Obama’s clients in the mortgage lawsuit likely borrowed more than the current value of the houses they lived in at the time.
Those 31, all now likely underwater, includes clients who are still paying mortgages and some who have sold their houses during the last four years. It does not include people who have had foreclosures or bankruptcies.
TheDC can’t determine if Obama’s home-owning clients are further underwater than other Chicagoans, partly because the city databases don’t show how much the clients still owe on their mortgage.
But Zillow’s data does show that Chicago has one of the highest underwater mortgage rates in the country, with some ZIP codes showing a higher rate of underwater houses than Las Vegas’ 71 percent or Detroit’s 56 percent.
Many of Obama’s clients lived just a few miles south of the president’s own $345,000 house in Chicago’s Kenwood neighborhood.
Seventeen clients lived in ZIP code 60619, where 43 percent of homes are now underwater, according to Zillow’s “negative equity” map. Another 15 clients lived in 60628, where 46 percent of owners are underwater. Eleven lived in 60649, where 61 percent of homes are underwater.
Nationwide, roughly 24 percent of home mortgages, or 11 million homes, are underwater by an average of roughly $60,000, according to an August 2012 report by Corelogic, a real estate analysis firm. Homes owned by mid- and low-income people are twice as likely to be underwater as high-income homes.
The current average values of homes in Chicago’s 60619, 60628 and 60649 ZIP codes are only $106,800, $88,000 and $83,100 respectively, according to Zillow.
The underwater, bankrupt or foreclosed clients also likely have little or no wealth for their retirement.
Foreclosures also damage borrowers’ credit records and make it difficult for them to get subsequent loans, homeowner’s insurance and auto insurance, or even to meet employers’ hiring requirements, says Chi Chi Wu, a lawyer at the progressive National Consumer Law Center law firm.
The ov
erall loss of wealth among Obama’s African-American clients likely exceeds the nationwide average for African Americans.
And because of the housing bubble, “[f]rom 2005 to 2009, inflation-adjusted median wealth fell by … 53 percent among black households, compared with just 16 percent among white households,” according to a July 2011 report by the Pew Research Center.
In 2005, half of all African-American families had wealth greater than $12,124. By 2009, the families’ median wealth had plummeted to $5,677.
Chicago’s housing values only started to recover in July 2012. “I don’t want to depress myself … [but] I know that the value of this house is nowhere where it was four, five, six years ago,” Renee Brooks told TheDC.
Costs Imposed on Other Americans
Each client’s wealth losses have been shared with other Americans through declining neighborhood-wide property values.
In Marcella Wilson’s neighborhood, nearby home values have dropped, she said, because “crooks [in banks] were giving people money they couldn’t afford.”
“My neighborhood is so-so.” she said. “Fifty years ago, when we moved in, it was a very lovely place.”
Seventeen of Obama’s clients lived in her 60619 ZIP code.
Each foreclosure cost neighbors, most of whom are African-Americans, up to $220,000 in lost property value, according to a study of Chicago foreclosures in 2003 and 2004 by the left-of-center Homeownership Preservation Foundation.
A single foreclosure can also “impose up to $34,000 in direct costs on local government agencies, including inspections, court actions, police and fire department efforts, potential demolition, unpaid water and sewage, and trash removal,” read the study, titled “The Municipal Cost of Foreclosures: A Chicago Case Study.”
At least 55 of Obama’s 186 clients received foreclosure notices, likely costing the city taxpayers roughly $12.5 million, according to the study’s methodology.
Nationwide, taxpayers are paying roughly $124 billion to prop up the two quasi-government corporations that effectively paid banks to offer high-risk loans to poor people, including poor Chicagoans. Progressive leaders at Fannie Mae and Freddie Mac bought many of the banks’ high-risk loans and then sold them to Wall Street investors.
Pension funds and other shareholders that invested in the banks also paid some of the cost imposed by the progressive-inspired loan crisis.
For example, Citigroup’s value doubled from $250 to $500 per share in 2007, after Citibank’s executives made their 1998 deal with the progressives. But company shareholders’ wealth was slashed by 90 percent during the collapse, wiping out roughly $800 billion in wealth held by investors, including union members’ pension funds.
Societal Costs
Progressives’ top-down bubble hit the nation, but Chicago was walloped unusually hard.
With the foreclosure crisis came a rapid rise in Chicago’s unemployment, especially among minorities. By 2011, the city’s unemployment was the third-highest in the nation, after Philadelphia and Los Angeles.
Housing crises tend to boost local crime rates, according to left-wing housing experts Dan Immergluck and Geoff Smith. A 1 percent increase in the city’s foreclosure rate generated a 2.33 percent increase in crime during the early 2000s, said their study, published in the November 2006 issues of the journal “Housing Studies.”
That experience was repeated after 2007 when the city’s murder rate stopped falling, and jumped 36 percent in the first six months of 2012.
When the body count reached 283, the city’s mayor asked the Nation of Islam to serve as neighborhood watchmen.
The mayor’s selection of the hardline African-American group underlined the fact that a vast majority of the mayhem took place in the non-white communities hit hardest by the real estate crash. In 2011, for example, 75 percent of murder victims were African American, and 20 percent were Hispanic, according to a city police report.
Child abuse rates also climbed statewide.
Nationally, violence against children rose in line with rising rates of mortgage delinquencies and foreclosure from 2006 onwards, warned a July 2012 study in the peer-reviewed journal “Pediatrics.”
“Between 2000 and 2009, rates of physical abuse and high-risk [traumatic brain injury] admissions increased by 0.79 percent and 3.1 percent per year, respectively,” in line with foreclosures rates, read the study. The data came from 43 hospitals in 17 of the top 20 metropolitan areas. “These results suggest that housing concerns were a significant source of stress within communities and a harbinger for community [child] maltreatment rates,” the report continued.
Chicago’s health care office declined to supply TheDC with child abuse statistics. Child abuse reports climbed 5 percent statewide in 2012, however, according to a June 2012 report by the Illinois Department of Children and Family Services.
Amid the cascading disasters, the city’s population shrank between 2000 and 2010.
Chicago on the Potomac
President Obama’s Chicago lawsuit now may become a national harbinger as he applies his Chicago-era policies to the entire nation.
The president is reviving the “redlining” suits as so-called “disparate impact” lawsuits against banks, even when there is no evidence of discriminatory intent.
For example, Richard Cordray, his controversial recess appointee to run the new Consumer Financial Protection Board, said during an April meeting that regulators will sue when they can find significant differences in loans offered to — and accepted by — “African-American or female borrowers … [versus] similarly situated white or male borrowers.”
In July the Department of Justice pressured Wells Fargo to sign a $125 million settlement after it charged that the bank allowed its loan officers in 2004-2007 to charge many African-American and Hispanic borrowers more than they charged many white borrowers.
However, the settlement, jointly signed by the DOJ and Wells Fargo, said the bank “has not been advised by the Department of Justice that the department alleges that any employee … discriminated intentionally.”
“Wells Fargo’s borrower data proves that its subprime borrowers had significantly weaker credit characteristics than its prime borrowers,” read the joint settlement.
Obama administration officials are also trying to revive the 1997 Community Reinvestment Act, which allowed progressives to threaten the banks: “Some have argued that the Community Reinvestment Act is responsible for the mortgage crisis,” Cordray told the April meeting of progressives from Chicago and other cities. “We disagree,” he said.
And Obama is leveraging lawsuits to force banks to fund his progressive allies.
In February 2012, the DOJ pressured several large banks to sign a $25 billion settlement for their bubble-era “robo-signing” practice, a low-quality loan origination tactic adopted by the banks and their outsourced mortgage-agents amid federal government pressure to lower their lending standards.
At least $1.1 billion of the $25 billion settlement will be given to Democratic attorneys general for distribution to housing groups and allied activists. The Illinois Attorney General’s Office, for instance, will get $110 million for “remediating the effects of historical levels of foreclosures … [and for] legal aid services, housing counselors, guidance counselors, outreach to buyers, funds to community revitalization initiatives,” deputy press secretary Maura Possley told TheDC.
The $25 billion payment seems large, but banks can “pay” most of it by promising not to collect mortgage-debts that homeowners can’t repay, even when those mortgages are owned by other investors, said Edward Pinto, an executive vice president and chief credit officer for Fannie Mae until the late 1980s.
Obama is using federal funding to build the nation’s dominant mortgage firm. The government — meaning U.S. citizens — has already bought roughly $854 billion of bubble-era home mortgages since 2008, said Nicole Gelinas, a financial analyst and a columnist at the conservative Manhattan Institute. Officials are now trying to inflate the value of those mortgages with tactics that may spur inflation that would further drain everyone’s bank balance or create another real estate bubble, she added.
For example, Obama is pushing a proposal that would allow many homeowners to refinance their risky mortgages at a lower interest rate.
That could help the homeowners, but it could also leave taxpayers with expensive but worthless debt, she said, if inflation rises or the economy stalls.
Obama is also using federal financial power to pump up lending to poor areas via the Federal Housing Administration.
“They’re making a lot of loans … to people with 640, 630, 620 [credit] scores” who have a 25 percent chance of foreclosing, said Pinto.
Chicago is getting some of those bad federal loans, including via Latino mortgage sellers who fraudulently portray several family members’ earnings as income from one or two jobs, said Byas. “It is still happening today… I see Latinos signing up loans for Latinos, and they can’t afford it.”
Additionally, Obama is using his regulatory power to boost the “regulatory equity movement” that tries to tax the suburbs to aid poor cities, said Stanley Kurtz, author of the new book, “Spreading the Wealth.”
“These are policies that Obama generally keeps under the radar… so they don’t receive too much scrutiny,” said Kurtz, whose book shows how Obama is boosting the controversial movement.
Even as he is repeating and extending the top-down policies that created the disaster, Obama is working hard to blame the banks, Wall Street and the GOP for the damage he and other progressives caused.
The 2012 Election
Obama’s previously unrecognized contribution to the nation’s subprime disaster will likely be highlighted in the 2012 election season, partly because many voters are still angry about the nation’s damaged real estate market, and are seeking political fixes.
In an Aug. 13 Florida stump speech, Republican presidential candidate Mitt Romney declared that “8.5 million homes foreclosed — a record level — is not success, Mr. President. We need to help the people in Florida with housing policies and get housing prices up again and let people stay in their homes.”
Obama’s record as a private sector lawyer also contrasts with the former Massachusetts governor’s record as a private sector investor.
Romney’s supporters say he used his investment skills to create more than 100,000 jobs and expand investment capital for his partners through his work at Bain Capital.
Romney also provided a $50,500 mortgage to a Texas couple for 15 years after a five-house real estate investment went awry. “The money they borrowed from him to buy their home in 1997 was life-changing,” read a New York Times’ Aug. 9 article describing Romney’s private sector foray into real estate.
Romney’s detractors, including Obama, say Romney pursued profits and oversaw layoffs and outsourcing.
But Obama’s work as a subprime pioneer put most of his 186 clients on a path to foreclosures, bankruptcies and inflated debts, according to court records.
White House officials have not responded to repeated emails from The Daily Caller seeking Obama’s assessment of his lawsuit record.
Nor have they provided any information about his financial gains from his work at Miner’s firm. Obama has not released his tax records from 1998 or 1999 — when he was paid for the 1994 subprime case.
But the economy still hasn’t recovered from the property bubble.
“People can’t afford to pay their mortgage,” said Samuel Wilson, owner of the hardware shop. “They were able to do it, but the economy started pulling them in different angles and they didn’t have anything to live with.”
“I weathered it … [but] the younger people are not able to keep up,” said Maudestine McLeary — one Obama’s lawsuit’s plaintiffs.
And Marcella Wilson — no relation to Samuel Wilson — recently took out a mortgage on her paid-off home to help her struggling son and daughter. “I needed some money … [because they] are in kind of bad straits,” said the 80-year-old African-American widow.
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