News Release

Is Obama Further Privatizing Housing Market?

Online real estate database Zillow CEO Spencer Rascoff is scheduled to interview President Obama at 1:00 today. A White House statement says: “Yesterday, President Obama spoke in Phoenix about his plan to build a better foundation for homeownership. This afternoon, he’ll be answering your questions about that plan and what it means for homeowners — and those who want a home of their own.”

Economist Dean Baker characterized the plan: “The main goal appears to be subsidizing mortgage-backed securities.”

LAURA GOTTESDIENER, lauragottesdiener at gmail.com
Gottesdiener is the author of A Dream Foreclosed: Black America and the Fight for a Place to call Home, published this month. She was featured on “Democracy Now!” yesterday and her recent article for TomDispatch was widely cross-posted. She is associate editor at Waging Nonviolence.

Said Gottesdiener: “A more fully privatized housing market isn’t the solution, nor does it come close to fulfilling the sweeping vision for restoring middle-class America that President Obama promised to unveil on this tour. …

“Let’s take a look, briefly, at the companies Obama proposes should form the backbone of the housing market. Morgan Stanley is currently embroiled in a lawsuit alleging lending discrimination in Detroit. UBS just paid $885 million to settle allegations it lied about the risks of mortgage-backed securities. Wells Fargo recently settled one lawsuit over discriminatory REO maintenance and may soon face charges (along with Bank of America) for ‘flagrantly‘ violating the terms of the $26 billion robo-signing settlement in 2012. Credit rating agency Standard & Poor’s is undergoing a $5 billion lawsuit for manipulating the ratings of toxic mortgage bundles. The Department of Justice sued Bank of America for defrauding investors and lying about the risks of their mortgages the very same day as Obama’s speech. …

“We’ve already tried policies that benefit Wall Street and massive corporations, and all we’ve ended up with is more financial consolidation, speculation and criminal activity. If we really want to benefit the majority of Americans, let’s focus on proposals like implementing widespread principal reduction and creating structures of collective local ownership like Community Land Trusts. Otherwise, the aspiration of having a stable place to live will continue to be, for millions of Americans, a dream foreclosed.”