Capitalism: A Love Story Page #9

their home equity,

which is just

Alan Greenspan-speak

for ''borrow against

your home.''

And if you can't repay it

you'll lose your house.

lt actually started by talking

mostly older Americans,

people who already

had homes,

into refinancing

their homes

to get them out of houses.

Moore:
Yes, get senior citizens

out of their houses.

The scam to swindle people

out of the homes

they already owned

was masterful.

Here's how it worked.

First, tell these homeowners

that they own a bank.

And that bank is your home.

So if your home

is worth $250,000,

that makes you

a quarter millionaire.

You're sitting

on a goldmine.

You own your own bank.

The bank of you.

And you can use your bank

to get more money.

Just refinance.

Everyone's doing it.

Of course hidden in the dozens

or hundreds of pages of fine print

are tricky clauses that allow the bank

to raise your interest rate

to a number

you didn't know about,

perhaps so high that you won't

be able to repay your loan.

But that's okay.

lf you can't pay it

we'll just take your house.

Of course, before they

could take your house

they needed to change

the regulations and the rules.

Moore:

What's this photo l found here?

lt was in an annual

report of the FDlC.

John Gilleran, the head of the Office

of Thrift Supervision,

which is supposed to regulate

savings and loans,

he's the guy

with the chainsaw.

And the four other

grinning idiots

in the photo are the three

leading lobbyists in banking

and the deputy director of the Federal

Deposit lnsurance Corporation.

And they're poised over

a pile of regulations.

And this is supposed

to demonstrate

their intention

to destroy regulation.

And they succeeded.

And now we know what happens

when you destroy

financial regulation.

You produce a financial

catastrophe.

A growing family

with a lot of debt;

A young couple

with no down payment;

A business owner whose

income was hard to document;

Every one of them was

turned down for a home loan

by three different lenders.

l'm with Countrywide

and l got them all approved.

Moore:

Don't be fooled by the pleasant demeanor

and blonde hair.

lt's the same pitch

the mafia gives you

in the neighborhood.

( imitating Brando )

l know how you feel.

You got a lot of debt.

You don't have any money

for the down payment.

You can't find

your documents.

lt's okay.

l'll make you a loan you can't refuse.

lt's called subprime.

You pay no interest now.

You pay a little more later.

Don't worry about later.

We'll take care of you.

And like the mafia,

Countrywide,

Citibank, Wells Fargo,

Chase...

Let's go.

...they would someday

stop by to collect

and take your home.

Randy Hacker:

l was paying 1,700 a month and making it.

Then it went to 2,000.

Then it went to 2,300.

Then it went to 2,700.

Can't do it.

Moore:
These are the Hackers

of Peoria, lllinois.

Randy is a railroad worker

and Donna works

for retirement homes.

Their farm, which had

been in the family for over four decades,

had been foreclosed

on by Citibank.

Randy had had an accident

on the job years ago

and was now

on disability.

They absolutely just plain

f***ing stole everything,

my whole life's savings

and everything,

by a stroke of a pen

and a lawyer and a judge.

Moore:
The Hackers showed me

the foreclosure notice from Citibank.

What caught my eye

was the town from which

their mortgage came.

lt turns out that a company

owned by the big banks

has chosen to run

of all places, one of

the most desperate towns

in the United States.

This company hires

the people of Flint

to send out nearly 60%/%

of all the foreclosure

notices in the country.

ln what seems to be some

sort of cruel joke,

my hometown was now

in the service

of helping to turn

the rest of America

into Flint.

Typically when a bank forces

a family like the Hackers

out of their home

they hire professionals

to come and clean up

the place.

ln this case,

the bank figured,

why pay top dollar when

we've got a desperate family

who will work cheap?

ln a final humiliation

the Hackers went

to work for the bank

that took their home.

Donna:
''Property is to be turned over

in broom-clean condition

with all trash, debris

and personal property removed.

Upon delivery of the keys

the PAS representative will

hand you a check for $1,000.''

Randy:

You know, 1,000 bucks

to get out

of my own house and stuff,

l really want to thank them.

That was really something.

My wife worked for a week

to clean the house up

and make sure it was

presentable to somebody else.

l'm glad they did that.

l have to thank them.

lt was awful nice of them.

Yeah, l'd like to

thank them all right.

l have one more.

Oh, that goes to

our bedroom door.

Trying to think what--

that goes that that.

l had a lock on it

to keep kids out

'cause l have guns.

And here's

your money, Randy.

Moore:

What you're witnessing

is a robbery.

l'm starting to understand

why people,

they lose their minds

and start shooting people.

l'm not gonna say l would

do something like that,

but l can see how

they get people

into that situation where

people go in there with bombs

and blow them up

and shoot at them.

Anything that happens to them

people, they deserve it,

is all l can say.

l hope something happens--

yeah, well.

Can't say no more.

Some roadkill right there.

Moore:

This is Bob Feinberg.

He handled all the VlP loans

for Countrywide,

the nation's largest

mortgage company.

Although Countrywide

mainly specializes

in outrageously high interest

loans for low income people,

Bob's job was to take care of

some of the country's

top political leaders.

Bob:
One day one of the bigger

bosses called me in the office.

He said, ''l want you

to call this guy.''

l said okay.

And he said,

''He's a friend of Angelo's.''

Angelo Mozilo's the CEO

of Countrywide.

''Give him this rate.

Waive these fees.

And get it locked in.

And don't f*** it up.''

And l was like,

''Oh, okay.''

So it was

a special department

that handled friends

of Angelo.

Discounts were being given.

Fees were being waived.

And at times paperwork

was being waived.

We literally would

write on the file ''FOA.''

These were really

important people.

l had Richard Holbrooke--

Ambassador Holbrooke,

Donna Shalala,

people on Capitol Hill, people that

regulate the mortgage markets,

people that regulate

Wall Street,

and Jim Johnson,

head of Fannie Mae,

Alphonso Jackson

the secretary of HUD...

Senator Conrad from

the Finance Committee.

l had the TV on in my house.

l was in the kitchen

and l heard a voice

pontificating

about predatory lending

and how we have to put an end to it.

Our nation's financial regulators

are supposed to

be the cops on the beat

protecting working Americans

from unscrupulous

financial actions.

Bob:
Senator Dodd--

Christopher Dodd-- was speaking.

And l just stared at

the television and l was upset.

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