The Beautiful Symmetry of the Foreclosure Racket
A handout for poor Warren
Most residents of Chestertown, Maryland are familiar with the so-called ìsee-thruî building on Washington Avenue, on the site of a former restaurant. A new commercial project that has remained incomplete and vacant for the last couple of years after the developer BBC Properties got into some difficulties and Wilmington Trust was left holding the mortgage paper as part of its disastrously mismanaged loan-portfolio.
In November this year M & T Bank Corp acquired Wilmington Trust (WT) for a knockdown price of only $351 million. WT, having previously been bailed out by the taxpayers in December 2008 with $330 million of TARP (Troubled Asset Relief Program) funds to purchase preferred stock.
As if this isnít enough of your money being wasted it should be remembered that M & T Bank itself was already the recipient of $751.5 million in TARP funds. That makes a grand total of $1,081,500,000 of taxpayerís capital given to a company which is largely owned by one of the richest men in America, Warren Buffett. You might think that Mr. Buffett and his fellow shareholders would at least pay back a few cents of your money before they went on a $351 million shopping spree to snap up Wilmington Trust?
Clearly notóso local residents can now feel good that not only can they choose to increase the billionaireís fortune voluntarily by buying ice-cream from Dairy Queen or car insurance from Geicoóbut they are also forced to pay taxes to the government so it can pass these funds on to subsidize Mr.Buffettís bank investments!
Meanwhile the ìsee-thruî building on Washington Avenue remains empty, deteriorating, and subsidized by YOU, the taxpayer!
The beautiful game
The other month I attended a foreclosure auction on the steps of an Eastern Shore courthouse. The property, a small townhouse about four years old, had been vacated by the owner who just handed his keys in and walked away. The original mortgage holder, Countrywide, was then stuck with the original cost of the home, the missed interest payments, and all legal fees, etc.
Meanwhile, Countrywide had gone out of business and was acquired by Bank of America. A recipient of $45 billion in taxpayer TARP funds which it has since paid back with low-interest loans from the same government but which come with far fewer strings attachedóa slight of hand that appears to go over the heads of our ìlamestreamî media.
Anyway, it was fascinating to watch the foreclosure auction as the bids went up to well over the fair market price of the property and local first-home buyers were effectively locked out of the process.
A couple of weeks later I decided to do a little investigating and asked the Clerk of the Courts to see the documentation and follow the details of the foreclosure process.
Now remember, this property may have been owned by Bank of America but that is basically YOU, the taxpayer. They put the home up for auction and not only got all their original loan back, they got enough money to cover all the missed mortgage payments, all their legal fees and made over $20,000 profit on the deal!
Well, isnít that good news for the bank, and ultimately us the taxpayer? I hear you say. Not so fast folksóthe winning bid that paid well over the current market price for this home and effectively locked out local people who wanted to get a foot on the property ladder was none other than Freddie Macóthe government-owned (read taxpayer-funded) mortgage which, with its twin Fannie Mae, looks like itís costing us about $154 billion before the current crisis is over.
Months later the property remains empty and deteriorating, despite local people who, if it wasnít for this government-funded racket, could have had a home of their own. Youíve got to hand it to our financial elites, when it come to screwing taxpayers like you and me they are in a class of their own but isnít the symmetry of it all just wonderful?
Ted Newcomen is a citizen-journalistósomeone who is tired of the lazy ìlamestreamî media, which is obsessed with the cult of celebrity and just recycles press releases for the establishment.
This article, sent to Socialist Viewpoint via email by the author, is an expanded version of an article that appeared on opednews.com, December 20, 2010.