The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Editorial:
Mortgage Settlement:
Another Great Deal ... for the Banks!

Feb 20, 2012

The attorney generals of 49 states signed off on a deal with the big banks. The banks will pay 26 billion dollars – a very small pittance of the several trillion dollars in damages that their 6-year mortgage scam caused. In exchange, the 49 states will drop most of their long investigation into mortgage fraud.

Bank profits will get a boost, executives will walk away with big bonuses and congratulations from Wall Street for another job well-done – and none of those criminals goes to jail! The charges pending against Countrywide – one of the major criminals in the whole monstrous scam – were “rolled into” this settlement. That is, the charges were dropped!

The attorney general of Oklahoma didn’t sign on – because he thought the banks should not have to pay back one thin dime!

So, here’s the deal – here’s the thin dime the banks are going to cough up.

Some people who lost their homes to fraudulent practices will get a payment from the banks – between $1,500 and $2,000. Not even enough to pay for the deposit, plus first and last month’s rent that they had to put on another house when they were evicted – not to mention all the money they had already sunk into their mortgage payments.

About a million families who are “underwater” on their loan – owing more on their mortgage than the house is worth – may get some reduction in the balance they owe. Ten million more families, also underwater, won’t qualify for the terms of this deal.

And the question is, anyway: why are millions of families “underwater” today?

They had the misfortune to take out a mortgage or refinance right during the worst of the real-estate speculation that the banks’ mortgage practices fueled between 2001 and 2007.

When the speculative bubble collapsed, when prices began to come back down, people were left owing two or three times what the house came to be worth.

The banks, that pocketed enormous profit from driving up housing prices, aren’t giving back the trillions of dollars they stole in this speculation. They are reducing the principal by a few thousand dollars for only a smallpercentage of the people they defrauded.

And here’s the final nail in the defrauded homeowners’ coffin: guess who gets to “monitor” this deal, to make sure the banks fulfill the measly little commitments they made. That’s right, the banks themselves.

This mortgage settlement is another brutal demonstration of who owns power today in this country – the bankers and the rest of the capitalist class.

They made this outrageous settlement simply because they could. They own the power – and they use their power to increase their wealth at every turn, at the expense of the population.

Until the working class begins to mobilize its formidable forces, there is no way to contest that power today. Every problem we face – housing, the mortgage scam, unemployment, cuts to wages, cuts to the schools so the banks get more money from the states, cuts to public services, cuts to social services – every one of those problems is a consequence, directly or indirectly, of the bankers’ and the industrialists’ drive to accumulate more profit, more wealth in their tiny little corner of the universe, just for themselves.

The power the capitalists have over our lives can be taken away from them – but only when the laboring population comes to realize that it has no other choice but to fight, no other choice but to depend on its own forces and strive to put its own hands on power.