Foreclosure Fraud: Wall Street Cheats the Middle Class Again

Once again the big Wall Street banks are wreaking havoc with our economy in order to come away with outlandish profits at the expense of poor and middle-class people.

By Mike Lux, AlterNet
Posted on October 17, 2010, Printed on October 18, 2010

I was heartened to see a group of Democratic Senators write this great letter to Ben Bernanke and administration officials on the foreclosure fraud issue. They came out strongly for several important things regarding homeowners' rights, and they framed the issue perfectly: this is not some minor technical problem regarding some mislaid paperwork in a few cases, this is fraud by bankers on a massive scale. Along with this letter, check out this great op-ed by Sen. Whitehouse on the subject. 

Once again, in keeping with the pattern Digby first reported:

this is all Democrats doing the right thing, and not a single Republican lifting a finger to help. Another bit of great news: Elizabeth Warren echoed the Senator's message, calling the foreclosure issue "big and serious". This puts the administration clearly on the side of the idea that this problem isn't just a minor paperwork hassle, and that it matters a lot.

This foreclosure fraud issue is yet another domino falling, where once again the big Wall Street banks are wreaking havoc with our economy in order to come away with outlandish profits at the expense of poor and middle-class people. These huge banks are so powerful both politically and economically that they haven't worried about playing by the rules and following the law. Their thinking is that because they are too big to fail, and too influential in Washington, they can just get Washington to change the rules as they go along and bail them out whenever needed. They were shocked that their sneak attack at changing the mortgage rules got exposed by progressives and vetoed by the President, but they almost certainly still assume they can eventually get the rules changed to save them from their own fraud one more time.

This issue is example number one on why progressives need to remain focused on cleaning up Washington and standing up to the special interests who still act like they own the place. And our message has been getting through. Check out this striking new poll from MoveOn.org:

• An overwhelming 84% of voters polled, including 80% of Republicans and 81% of Independents, believe voters have a right to know who is paying for ads for a particular candidate.

• Fifty-six percent of voters overall (including 53% of Independents) are less likely to vote for a candidate if they know the ads supporting that candidate are paid for by anonymous corporations and wealthy donors.

• Forty-seven percent of all voters are more likely to support a candidate who insists that voters have a right to know who is paying for ads, with only 9% of total voters saying they are less likely to support a candidate who holds that position.

• Almost two out of three voters (63%) do not believe that the anonymous groups running ads hold the voters' best interest in mind. This belief is held by 65% of Independent and 70% of Democratic voters.

• A straight majority of total voters (53%) are less likely to trust a candidate to improve economic conditions if that candidate is supported by anonymous groups.

Those are very big, very dramatic numbers. People want to know who is behind these ads, and they want to kick the special interests off their throne of power. This message of changing and cleaning up Washington, challenging big corporate interests, and standing up to the banks on behalf of the middle class has the chance to come through in spite of the swarm of corporate money flowing into attack ads.

Whatever happens in the elections, this foreclosure crisis is ugly, and the economic dominoes that could fall as a result should scare all of us. It may well be that this fragile economy gets pushed into another crisis. The question then will be do we again arrange some kind of backroom sweetheart deal for the big banks that got us into this mess, or do we go the opposite direction, and save the economy by helping middle class homeowners first. If the bankers still "own the place" in Dick Durbin's famous words, we will get screwed again. If voters say no to these secretive special interest ads, and elect some more good down home Democratic populists like the Senators who wrote this letter, we might just win this round.