Читать книгу This Fight is Our Fight: The Battle to Save Working People - Elizabeth Warren - Страница 12

When America’s middle class is under assault, there’s pain everywhere, but much of that pain rains down harder on black and Latino families.

The evidence of this assault is especially clear when it comes to homes. Homes are good indicators of stability: when a family has its own home, the kids can go to the neighborhood school and the parents will usually take time to meet the neighbors and maybe even work together to spruce up the playground. Tiny condos and center-hall colonials, triple-deckers and Cape Cod farmhouses—homes are the tangible sign that a family is living the American dream.

Michael had the dream.

He was ready to tell me his story. Unlike Gina, he said, Sure, use my name—Michael J. Smith. Use my picture, too. I’m out there.

Michael is African American, married, and in his fifties. He’s a big guy, solidly built, with large hands. His smile is soft and almost sweet, and his voice is deep and reassuring; the gentle rhythms of his speech evoke his early years growing up in the South. For decades, Michael has been very involved in his church. More than once, he said to me, “It truly is our faith that keeps us going.”

When Michael’s family moved from Atlanta to the Woodlawn neighborhood of Chicago in the 1960s, his family and church held him close. There were gangs in his neighborhood, but Michael stayed on the path he believed in—God and family—and he never made a big decision without praying on it first.

As Michael tells his story, he warms up to all the good memories. In his twenties, he got a good job, married his high school sweetheart, and had three kids. They divorced, but he remarried soon after, and he and his wife, Janet, have a daughter named Ashley. From the first paycheck he ever took home, Michael started saving to make a down payment on a home. He and Janet bought their first home in Richton Park, a suburb of Chicago. As Michael put it, he always wanted “a neighborhood that was safe, that I could raise my children in, that was fenced in in the front and the back.” He particularly wanted his kids to have a yard to play in.

He kept those dreams front and center. Michael had a good job with DHL delivering packages and loading planes. Sometimes he was called on to do a lot of heavy lifting and there was pressure to get things done quickly, but he describes his time at DHL as “the most satisfying work I’ve ever done.” Janet worked at Chase for twenty-seven years, and she was proud that she had never missed a payment on any bill—ever. They kept right on saving, and after a few years Michael moved his family again, first to Hazel Crest, a predominantly African American suburb, and then to Homewood, which was more diverse.

When Michael spoke to me about the move to Homewood, he said, “We thought that we could do a little better.” But he and Janet didn’t jump right in. “We thought about it, prayed about it, looked at the numbers, and we had more than enough.”

Michael talks about the house he and Janet bought like it’s a beloved child. He tells about the three arches at the front of the house and about the pine trees in the backyard. He also wants me to know about the hedges out front where robins built a nest every spring. “We never clipped the hedges while the robins were there,” he notes. “They like their privacy.”

His conclusion: “We had kind of a great American story.”

Then the crash of 2008 hit and the bottom fell out. In the space of a few months, DHL eliminated 14,900 jobs—including Michael’s.

After sixteen years on the job, he felt like he’d been run over by one of his own trucks. Frantically, he spent the months that followed looking for part-time work wherever he could find it. But no one was hiring, and he quickly understood that he had no chance of getting a full-time job that paid as well as his old one and offered health insurance. By this time, Janet was no longer working at the bank, and Michael’s unemployment checks didn’t cover even their basic expenses. In the blink of an eye, Michael’s whole world had turned upside down.

A lousy mortgage made a bad situation worse. Michael and Janet had started out with a plain-vanilla, fixed-rate thirty-year mortgage. They weren’t in the house long when a mortgage broker talked them into refinancing, which meant that they agreed to take on a complex mortgage. Michael now realizes that it was a great deal for the bank, but not so much for his family. Once the mortgage payments ballooned and he lost his job, it was the kind of double blow that almost no family can survive. Somewhere in his heart, Michael knew that his family was doomed. Even so, he held out for as long as he could.

Ashley was now in high school and deeply engaged in her music, playing both the piano and the viola. Michael told me that when it was time to go to school in the mornings, “We did not need to wake her up, because she was so passionate about her instruments, she’d get up on her own.” Ashley was beginning to dream that she could pursue a music career; someday maybe she could play with a major symphony orchestra. Michael and Janet paid for extra music lessons for their daughter. “It was important to us to keep her encouraged and inspired,” Michael said. To make ends meet, they sold one of their two cars, as well as some of Janet’s jewelry. Michael even sold his wedding ring.

While they cut their expenses to the bone, their financial situation kept sliding downhill. Michael looked everywhere for work, taking anything anyone offered. They kept scrambling, but the numbers just wouldn’t add up.

Then the phone rang. Did Michael want to come back to DHL? The company was hiring back twelve people. That was twelve out of nine hundred former employees from his branch. Michael was sorry about the other people, but it felt good—very good—to be one of the chosen twelve.

The offer seemed like a godsend—a good job doing work he loved. And somewhere down deep, it felt like respect as well. It meant that someone like Michael who tried hard and did a great job would be rewarded for the extra energy he put into his work.

But the story turned out a little differently. This time DHL wasn’t offering him his old full-time job with benefits. This time he was offered part-time work, no guaranteed hours, no benefits.

Welcome to work—twenty-first century–style.

Yes, the job moved Michael from “unemployed” to “employed” on the government statistics. Yes, he had a paycheck. Yes, he was grateful.

But Michael didn’t fool himself. “I knew right away it wasn’t enough, because my mortgage was too much for me to pay. It was not enough to sustain myself and my family.” He shook his head. “It was just an unbearable situation.”

As Michael and Janet spiraled toward foreclosure, they desperately tried to work things out with the bank. With hindsight, Michael reflected on how the broker had persuaded him to take on the new mortgage: “I felt like I had been scammed.” At one point, he considered suing, but he backed away from the idea after he thought about how much money it would cost to hire a lawyer and how fast his home was slipping away.

Finally the bank moved in to foreclose on the family’s home. Michael described his growing depression: “I can remember myself many, many times looking out the window of the house in despair, praying, ‘What am I going to do?’”

And then this big, prayerful man—this strong man who had kept the gangs at bay, this determined man who had saved and scratched and purchased a home for his family—this man just gave up.

When Michael and Janet lost their home in foreclosure, their $17,000 down payment disappeared. Their credit rating was trashed. Their financial lives were destroyed.

Michael repeats the date his life changed like a mantra: 10/10/10. That’s the day the family moved out and Michael handed the keys over to the bank.

But for Michael, it still wasn’t over. He and Janet rented a place nearby. Their former home sat vacant, and every time Michael went to the grocery store or one of the local shops, he would pass the house. When it snowed, the snow just piled up. Every time he saw the place, he relived the failure. His house—his house—sat abandoned. So finally he went back to the house again, this time with a shovel, and removed the snow from the driveway and the front walk.

As winter gave way to spring and then to summer, Michael looked after the house and mowed the lawn. He checked on the robins. After he swept up around the place, he would talk with his old neighbors. Several of them had stored the family’s belongings, and when they had garage sales, they included Michael and Janet’s things and passed along the cash to the family.

Michael still keeps a picture of the door of his foreclosed home, with Ashley peeking through the window.

Month after month, Michael kept going by the house, thinking about the life he and his family had once built there. Shaking his head, he told me, “I just got this horrible pain in the pit of my stomach every time I went past it.”

How does Michael describe the 2008 crash? “It broke my heart.”

I CAN’T LOOK at photos of smiling mortgage company CEOs or read about the latest multimillion-dollar bonuses for Goldman Sachs partners without thinking of Michael and his beloved house with the robins in the hedges. The executives of the giant financial institutions figured they had invented gold. The formula was simple: first, make a fortune by tricking families into signing on to really lousy mortgages; next, make another fortune by bundling those mortgages together and selling them to unsuspecting pension funds and municipalities; and finally, when it all blows up, go to the government for a gigantic handout.

I guarantee that not one of those corporate executives who crashed the economy lost his home. It’s also a pretty safe bet that while Michael was shoveling snow or mowing the grass at a house he no longer owned, they had already moved on to their next big financial deal. And now those big banks and those same insiders are partying hard again. They don’t care about the Michaels of the world—they didn’t on 10/10/10, and they don’t now.

There’s another layer to the foreclosure story of black and Latino families around the country: discrimination. Ugly, nasty, vile discrimination.

What did mortgage discrimination against black and Latino families look like? Did mortgage brokers sit around and say, “Here are some really stinky mortgages—let’s push these off to black families”? Or did they think, “Here’s a Latino family, and they probably won’t notice if we just shovel some crazy fees and the highest possible prices on them”? Or did they tell each other, “Here’s zip code such-and-such, and we can sell a lot of garbage mortgages there,” and zip code such-and-such turned out to be a predominantly black or heavily Hispanic neighborhood?

I don’t know what happened in the back office, and the mortgage brokers aren’t talking. But I do know that regardless of what they were thinking, the impact was the same. Whether the brokers targeted black and Latino families or whether they just stumbled over them, they destroyed the lives of a lot of people.

As the eventual investigations showed, even when adjusted for credit ratings, African American and Latino families consistently got the worst of the worst in mortgage deals around. Countrywide, now a subsidiary of Bank of America, admitted that in just five years, it discriminated against two hundred thousand black and Latino families, systematically targeting them for higher-priced, more dangerous loans than it offered to white families with the same credit histories. And that was just one lender.

Mortgage discrimination often starts with redlining—avoiding zip codes where African American or Latino borrowers are more likely to live. For instance, people analyzing loan data say that the California-based OneWest Bank has shunned nonwhite mortgage borrowers for years. And in city after city, from Los Angeles and Chicago to Miami and New York, banks have paid millions of dollars in fines over discriminatory lending practices. The list is long and shameful.

Did Michael’s lender target him because he was black or because of where he lived or just because he was unlucky enough to get the next crappy loan Chase was pushing out to anyone who answered the phone? However it happened, once his mortgage payments started ratcheting up, there was no way Michael could keep that home. And here’s the part that really rubs hard: the banks knew that the chances that he would lose his house were high from the day he signed the mortgage refinancing papers—high, but well hidden in the fine print. Michael had been sold a mortgage that was like a grenade with the pin already pulled out.

As he slid toward foreclosure, Michael suspected that he’d been targeted because he was black. “I really did,” he told me. “When they found out who I was, especially when it came time to redoing the loan …” His voice trailed off.

For Michael, confirmation came later, when he was struggling to hang on to his home. It was at the height of the financial crisis, and he had gone to the Chicago convention center for an event for people in trouble with their home mortgages. He described the scene: thousands of people were lined up, all facing foreclosures and all hoping to find a way to save their homes. He was there for thirteen hours, and as he waited his turn for advice, he looked around. “Thousands of African Americans were there at that time,” he recalled. “The place was just filled with African Americans and Hispanics. That told me who was targeted.”

Latinos were crushed by the housing crash as well. In the wake of the Great Recession of 2008, nearly one in three Hispanic households had zero or negative net worth. Over the period from 2005 to 2009, Hispanic household wealth dropped 66 percent. Research showed, as the Washington Post reported, that “blacks and Latinos were more than 70 percent more likely to lose their homes to foreclosure during that period.”

Years after the financial crash, signs of housing discrimination persist. After analyzing its extensive 2013 data, Zillow reported that compared to whites, African Americans and Latinos are more than twice as likely to be turned down for a mortgage. Government data from 2015 also shows that the hurdles for homeownership are higher for both blacks and Latinos.

Discrimination in the rental market is also widely documented. In 2016, a Connecticut real estate firm paid thousands of dollars to settle allegations that it had discriminated against minority applicants for apartments, including offering a white applicant an apartment tour while denying a tour to an African American applicant. Also in 2016, the Department of Housing and Urban Development settled with a California apartment complex that discriminated against Mexican applicants by refusing their forms of identification while accepting a Canadian’s ID. And this sort of discrimination has been going on for a long time: favoring white renters while turning away black renters, for instance, is pretty much what was happening in some of President Trump’s apartment buildings back in the 1960s and 1970s—and which ultimately resulted in a settlement with the Department of Justice.

The housing collapse wiped out trillions of dollars in family wealth nationwide, but the crash hit African Americans and Latinos like a tidal wave. And the hit was doubly hard because these were the families that, generation after generation, had already been aggressively discriminated against in housing. Restrictive deeds, land sales contracts, redlining—American history is littered with examples of housing laws and lending strategies that were designed to deny black and Hispanic families mortgages and that prevented them from building housing wealth.

For most middle-class families in America, purchasing a home is the best way to build financial security. A home isn’t just a place to live; it’s also a retirement plan: pay off the house and live on Social Security. A home provides financial credibility and reassures a banker that someone is a good risk to start a business. A home provides a way to help the kids make it through college and a safety net if someone gets really sick. And, if all goes well and the grandparents can stay in their home until they die, a home can give the next generation a boost. Selling that home can provide a family with the money needed to move up the ladder, which, in turn, means that the grandchildren will have better chances in life.

That was the big and brilliant idea. Start with homeownership, build a little more security, and then build a little more and a little more. Diversify into retirement savings, maybe get a better job or start a business, help the kids, and then the grandkids—and keep the ball rolling forward. And it worked that way, one generation after another, for much of the twentieth century, at least for white Americans. But for black and Latino Americans, it was like swimming with rocks in your pocket: possible, but a lot harder.

Housing discrimination isn’t the only way systemic racism pulls black and Latino families down. Discrimination has been thoroughly documented in criminal justice, in employment, in education, in auto lending, in access to bankruptcy relief, and in health care—even in access to stores that sell fresh produce. The cumulative impact of decade after decade of discrimination becomes painfully obvious in just a handful of economic snapshots:

 Among those who work full-time, African Americans earn 59 cents and Latinos earn 70 cents for every dollar earned by whites.

 For each dollar a college degree adds to the income of a black or Latino graduate, the same degree adds about $11 to $13 for whites.

 Compared to whites, African Americans are 80 percent more likely to be unemployed; for Latinos, that figure is 37 percent.

 Compared to white families, black families are 68 percent more likely, and Latino families twice as likely, to have nothing in retirement savings.

The financial crash pounded all families, regardless of race. The devastation wasn’t, however, evenly spread out. Everyone—blacks, Latinos, whites—got cheated on mortgages, but a much higher proportion of blacks and Latinos got cheated. And when they got cheated, everyone—blacks, Latinos, whites—often got wiped out, but a higher proportion of blacks and Latinos had nothing else to fall back on. Blacks and Latinos had lower incomes and less in savings, and they got less help from other family members. The lesson is clear: economic racism makes every other problem worse.

Michael will never get over the 2008 crash. The memory of the day he and his family packed up and moved out will be with him forever. Whatever else happens in his life, he will always recall shoveling the snow and mowing the lawn and checking on the robins long after the bank had taken away his home.

A handful of Wall Street insiders boosted their companies’ short-term profits and pumped up their own fat bonuses by selling financial grenades with the pins pulled out, and millions of people like Michael ended up with their lives blown apart. I know life isn’t fair, but how did our country get to the point where this much unfairness became business as usual? Surely we are a better people than that.