For sale: The American dream | Fault Lines

[Music] Sheriff's Department hey there hi I am here to affect the eviction of this property so I need you to open the door and get whatever it is you need to get right I understand I've never been been through this before but I'm trying to go through the legal procedures for the house for the illegal for club right unfortunately for right now I have to kick everybody out of the house I turn the property over to the real-estate agent okay I mean you basically have about 15-20 minutes at the most it's just another day for deputy art Gonzalez from the Sacramento Sheriff's Department again today he's the victim Pat Patterson from the house she's lived in for six years they just round the clock for six months until they got so far and then they gave us the foreclosure notice don't forget your legal paperwork take that with you every week deputy Gonzales affixed dozens sometimes hundreds of people from their homes if you got a foreclosure it was a very rare very rare thing and now it's it's almost like the opposite you know foreclosures are there's so many of them now that's has become the norm I mean I can't take sides I gotta remain neutral because my job is to my main job is to affect the court order this scene is repeated every day across the US as the country continues to grapple with a housing crisis that has spun out of control you know I think you learned to block it because I think I would be a basket case I think if I let it get to me say you know you learn to just put it in the back of your mind somewhere lock it away you know [Music] [Music] owning a home has long been the centerpiece of the American dream but since the foreclosure crisis and the subsequent near collapse of the American economy that dream has turned sour more than four million people have lost their homes millions more are at risk and nationwide nearly one in three borrowers owes more on their mortgages than their homes are worth however not everyone sees the crisis as an unmitigated disaster okay this right here is a foreclosure this is another one right over here Peter Westbrook is a real estate investor in Stockton California which tops the nation in foreclosures the first house that I bought here this is a pre foreclosure thank everybody five in California it wasn't going to end the prices were just gonna continue to rise and rise and rise you know bottom dropped out and everybody bailed and so they had left of huge wave of vacant houses Peter brought us to Stockton's daly auction of foreclosed homes while the economy in the city has all but collapsed business here at least is brisk so this is the only outlet for a bank to sell a house that's foreclosed these people looking for foreclosure bargains are called vulture investors 2.6 [Music] like a way just basically come in and make all the money from people who are in bad situations but the fact is if we don't buy the property then the battle take the poverty back baby everybody needs to take a responsibility I pay my mortgage and I pay where I have to live so everybody else has to I didn't create that homeowners inability to make their payment I didn't create any of their the issues that they have personal responsibility is a big thing that's what creates opportunity if you ask you know people who've been foreclosed upon whose fault is it they often kind of say it's mine it's my fault I did the wrong things and instead of kind of saying this is a systemic problem social theorist David Harvey traces the roots of the current crisis back to the 30s and 40s when expanding the American economy became centrally linked to the real estate market capital is always producing surpluses at the end of the day if you have a profit you've got a surplus and the big question is what do you do with it what you do is you take part of that surplus and you reinvest it in something from every section of the country come reports of vastly increased building activities and in the United States housing and urbanization in general has been a vast field for the expansion of profitable opportunities this tidal wave of new construction is an important contribution to the economic rebuilding of America for decades the housing market has been viewed as an engine of growth homeownership is the basis of a half a contented family life the federal government incentivized homeownership life is entranced by the modern flat top stove two tax deductions and institutions like Fannie Mae and Freddie Mac too badly can't afford it ah but maybe they can this worked as long as it comes rose [Music] but since the 1970s real wages for most Americans have remained stagnant the clients for those houses started to run out and so you then find a conflict between the fact that wages have not been rising but housing consumption has to keep on rising so this mismatch then became absolutely crucial but bankers and federal regulators found a way out they've loosened the terms of credit and began to allow people with very low incomes to get mortgages the subprime industry was born and wall street used complex betting instruments to profit off these risky mortgages so you start to go more and more down into a population that cannot really afford it and that of course is a population that got foreclosed upon we started to plot foreclosures in a neighborhood group of community leaders in Chicago explained how this unfolded in their minority neighborhoods Demick issue it was and this is a map that shows you foreclosures initiated over the last two years every single block has foreclosures it was a contagion I mean right how could it be so uniform is there is there some connection but it wasn't particularly better toward Linda yeah likewise in California large sections of the population who had long been left out of the dream of homeownership were aggressively targeted for subprime mortgages they were rarely warned that the rates could get much higher in a short period of time California is one of the epicenters of the foreclosure crisis in the u.s. of the ten worst hit cities in the nation seven of them are in this state were at the state capitol to find out from legislators what they're trying to do to keep people in their homes let me just give you an idea of what the problem is in California up to five hundred thousand people have their homes either in foreclosure or about to be foreclosed upon such that they will lose their home California State Assemblyman Mike aim co-sponsored the homeowner Bill of Rights that was signed into law in July he says the first wave of foreclosures can be traced back to the predatory lending industry they would market loans particularly in low-income communities people of color Latinos in California are twice as likely to be foreclosed upon then say they're Anglo American counterparts not all the subprime mortgages were taken out by first-time homebuyers many were for equity loans secured against existing homes in other words refinancing what did that was sort of the house used to look like yeah and I had these archways put in I just love it a little bit more you know individual as the housing bubble grew homes became a crucial source of wealth and in an era of low savings a lifeline for people like 86 year-old Eileen Rivera but when that bubble burst an unemployment rose keeping up with mortgage payments whether primers subprime became impossible for more and more people that's what happened to Eileen and two years ago a real estate agent showed up at her door to say her home had been sold at auction I never heard anything like this in my life so I said what are you talking about this just by home of 45 years and I'm going nowhere this is my home could you ever imagine that being taking it away from you never they take it away in a moment I get him away quando get into this bajo my hope is a margarita Ramirez was a homeowner who thought she was doing everything right her expenses were rising and everyone recommended refinancing after all home values were soaring inequity yeah I don't know he met up with an equity but when her payments ballooned she realized the dangers of a subprime loan and refinanced again this time she qualified for a prime loan with a fixed rate but last year margarita lost her home the trouble began soon after the recession hit her husband was laid off and they applied for a loan modification from Bank of America la maleta casi on a policy must repeal it just nothing wasn't inches and inches and inches worth of documents margarita spoke to bank representatives in Spanish but she was also getting written notifications of foreclosure in English understand though - Monica intent process after months of negotiations her home was sold without her knowledge a homeowner may be negotiating the terms of their mortgage perhaps a lower amount over a longer period of time and yet a person possibly in the next room is literally preparing the papers for foreclose on the home that's called the dual track so the thing about that is that if they had modified her loans margarita is now renting back the house from the new owners she believes her home was Billy gali foreclosed upon she's now become an active member of a community organization in Oakland called causa who stuff just cause that helps residents facing foreclosure California is a non-judicial foreclosure state so they can sell our home at auction without ever going before a judge after a sustained campaign by Just Cause Bank of America admits some mistakes were made in Margarita's case but there's another obstacle the government owned fannie mae see this is one of the things that's confusing about the whole system they sell the loan to an investor and then the bank that we got the loan from becomes the servicer and so it's the investors who actually have the power to say whether a foreclosure happens today over half of all mortgages in America are owned or guaranteed by the taxpayer supported Fannie Mae and Freddie Mac they want indeed okay Freddie Mac Tomo position de propiedad same with me Freddie Mac and so in the case of margarita it was Freddie Mac or Fannie Mae Fannie Mae owned Margarita's mortgage and solder home but it refuses to consider that the foreclosure was illegal California's new law isn't going to help margarita either the problem we have is that 60% of the housing market in California is owned by what we call Freddie and Fannie and they are not subject to any California solutions and so that's why two percent of your housing markets really the federal government's hands now feels that's correct the Obama administration says it wants to keep people in their homes but the government bailed out the banks at the expense of struggling homeowners so we've seen a devastating transfer of wealth from black and brown communities to the 1% the government gave a great deal of money to the banks and said I hope you will learn but the banks didn't return to the banks and said can you please will you please renegotiate the mortgages and the banks kind of said well we may do a few of them but the banks have not really played ball with this at all they make huge huge profits get huge bonuses but they bear none of the risk because the government socializes the risk yeah here in Chicago protesters angry at the lack of affordable housing are taking advantage of President Obama's visit for the NATO summit to get their message across millions of Americans are emerging from the foreclosure crisis without a place to call home hence building his combat building for over four decades the federal government funded affordable housing for low-income families but since the 1980s funding for new housing has been slashed and nearly a quarter of a million public housing units have been demolished by we met housing organizer jr. Fleming at the protest he took us to his old home in Cabrini Green so Cabrini Green you see the amenity Bank it used to be the city's most notorious housing development it's all set for demolition yeah why look at that skyline you think poor people have a right to this view most of Cabrini's buildings have already been demolished displacing thousands of residents many many Americans are facing foreclosures and they need a safety net right now and that safety net does not exist anymore it used to be public housing so right now where we're standing is where I used to live at this is the last high-rise I lived in a 62 North Cedric there's actually a place where I got married now to stay here and see nothing a vacant lot a decade ago the city launched this ambitious plan for transformation tearing down most of its public housing we say that the plan for transformation is the plants of devastation where we come to find out that this was an economically motivated plan and that this plan had nothing to do with the people that this plan was based on the profitability of this land in their place mixed income developments have emerged where only a third of the units are reserved for public housing tenants they used the terminology affordable housing but what common American can afford almost two thousand three thousand dollars a month for rent not us at Lathrop homes one of the city's oldest housing projects we met marine Castagnoli and Mildred begun to of the few residents left clinging to their homes the lot of these farm is their livable it's just they don't want nobody didn't it's just like everything's on hold right now the people living here were offered vouchers to move out and rent in the private market most took up the offer but marina and Mildred who have been here for most of their lives refused I'm gonna leave when the bulldozers come that's not always so everybody they like you're still there I'd be like yep I'm gonna be the last of the Mohicans I'm gonna still be here the few who remain at Lathrop base an uncertain future what would happen to you if they did away with with this community of public health probably we got to stay with other members of family or we're gonna get going to have to go homeless because we don't have a job and there's a lot of people that doesn't have a job over here and and they need housing what do you think about the idea turning this into a mixed income area I really wouldn't want it like that because I hear all the stories of other places you know and I feel like it should just be housing for the people that need it because there is a lot of homeless people in Chicago and you know to me you could take the family the mothers and kids that aren't shelters I mean you can open up these apartments and help them you know [Music] vacant properties are spreading like wildfire to Chicago's poor neighborhoods [Music] the city plans to tear some of them down to reduce blight but the Chicago anti-eviction campaign and the take back the land movement have been trying to identify and clean up some of these homes and make them livable again I'm trying to the team I had a night to look at the plumbing we know we need to kitchen says today they're targeting this foreclosed house at Chicago's South Side why I hate evict people just being forced to take what they could you know and not with these shoes this family was evicted they left so fast that they didn't even take all these letters with them and all these pictures that were left behind really remnants of a life [Music] and so you have all of these empty houses in the midst of a large population that has real need for decent housing and you cannot put the two together because the income stream they have is not sufficient and for to satisfy the banks on housing it's at moments like this when the irrationality of a whole capitalist system becomes you know perfectly obvious so you should then start to say well maybe we have to really think about a completely different system and so we take over foreclosed and abandoned property we say we're recreating public house we got in touch with the family that was evicted from here Kenia Perkins and her three children agreed to meet us the next day back at their old home I wish I could have faith Kenya had been renting the property but was locked out when the building was foreclosed upon it was the hardest part of me figuring out where I was gonna go where my kids will want to sleep the next day it doesn't mean much I'm just grateful God put me through it why is that everything happened all that the same time they lost their grandmother it was like a rough time in our life so that's it you know come down on us as well a bit much Kenya story isn't unusual nationwide 40% of families facing eviction due to foreclosures are renters the anti-eviction campaign hopes to make Kenya's old home available to a homeless family the banks have taken away so much from people that it is about time that the people take something from the bank moving families into bank owned foreclosed homes is a creative response to the crisis but it could put the activists on a collision course with the law it was illegal for blacks and whites to eat together - dying together - sit together to walk together to talk together but it was something that was morally right so people tell us it's illegal for us to occupy our home it's illegal for us to take back the land they're right it is illegal but it's morally right a housing bubble that burst nearly six years ago triggered as we worst economic crisis of our lifetimes President Obama may have inherited this economic crisis that America still finds itself barman but after almost four years in power nothing his administration has done has been able to stem the tide of foreclosures ok nobody here just the furniture compensation no amount of money the measure of justice is enough to make it right for a family and who said their piece of the American dream roughly taken from did we bail out the banks of a degree plan out the people we bailed out the banks and now the people are paying the cost if we had bailed out the people there would be no foreclosure crisis and the banks would have been okay only one in four homeowners who applied for government-sponsored loan modifications got help and less than 10% of the 50 billion dollars Obama promised them has been spent so where's all that hope for change we got tanked sometimes I would tax you know and it hope is just that hope you know hope don't pay the dues hope don't give you house for too many in America the economic recovery isn't even on the horizon you save your entire life to buy a home it's where you raise your family that's worth kids memories are formed that's you're staking your claim on the American dream you know people always talk about the American dream it's not even a reality you know dreams are something that you can aspire to hope to have you can't have that dream of a house in America right now [Music]

Channel: Al Jazeera English

Views: 1,201,574

Keywords: aljazeera, al jazeera english, aljazeera english, al jazeera live, For sale: The American dream | Fault Lines, For sale, The American dream, American dream, Fault Lines, American, dream, sale, US' housing bubble burst, US' housing, banks, economic crash, housing, real estate, housing market, al jazeera, poverty, us poverty, us economy, human rights

Id: S3rzN42HE00

Length: 24min 40sec (1480 seconds)

Published: Tue Sep 04 2012