Hundreds of homeowners are planning a demonstration today in Manhattan in front of the corporate offices of Bear Stearns and JPMorgan Chase to protest the "taxpayer bailout...and refusal of the government and Federal Reserve to provide real solutions for the millions of homeowners at risk of foreclosure." We speak with Bruce Marks, the founder of the Neighborhood Assistance Corporation of America that is organizing the demonstration. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: We turn now to our last story, the continuing mortgage crisis and its impact on the economy. Just over ten days ago, the Federal Reserve put up $30 billion to help JPMorgan Chase purchase the collapsed Bear Stearns investment bank. Meanwhile, homeowners on the verge of foreclosure and those who have already lost their homes have received little support from the government.
Neighborhood Assistance Corporation of America, or NACA, is a group that represents thousands of homeowners and has been fighting predatory lending practices for two decades. They will be protesting today in front of the corporate offices of JPMorgan Chase and Bear Stearns here in New York. They’re demanding a moratorium on foreclosures and that banks roll back interest rate increases.
Bruce Marks is the founder and CEO of NACA. He was named Bostonian of the Year by the Boston Globe newspaper in 2007 for his fight on behalf of homeowners against Wall Street. He joins us now in our firehouse studio, preparing to march.
Welcome to Democracy Now!
BRUCE MARKS: It’s good to be here, Amy.
AMY GOODMAN: Well, talk about the bailout and what it means and who wins and who loses here.
BRUCE MARKS: Well, this is a corporate bailout. This is outrageous, because what you’re dealing with, you’re dealing with the symptoms, and you’re bailing out the wealthiest people in the country, when the fact — if you deal with the cause, which is the homeowners losing their homes for mortgages that are structured to fail, because no one can afford an interest rate of 12, 14 percent. So, people were qualified for an interest rate that was affordable — six, seven percent — but these are strangulation arms that says, I can pay that for a year or two, but then they double to 12 and 14 percent. So, clearly, we have millions and millions of homeowners who are at risk of losing their homes, not because of life circumstances, not because they lost their job or they had a personal crisis, but because the mortgage is pushing them into foreclosure. And the one that really orchestrated it more than any other investment firm was Bear Stearns.
AMY GOODMAN: How?
BRUCE MARKS: Because they’re the ones that put it together. You know, you can’t — if you’re a broker or a lender, you can’t do lending unless you have the capital, if you have access to credit. And it was Bear Stearns who was the most aggressive of getting the investors out there and packaging these mortgages together so that they would buy them from the New Centuries, and New Century was the biggest lender in the country, and yet they don’t exist. They didn’t exist five years ago; they don’t exist now, because they’re really put together by these investment bankers. And these mortgages are a defective product.
So what they put together as mortgage-backed securities was really never around homeownership; it was really about generating billions and billions of dollars in fees for the brokers, the lenders, the investment bankers and the rating industries. And now we’re bailing them out. So, if we’re about true business, where you take risk and you profit from it, and if you’re wrong on your risk, you should lose. But now the taxpayers are really paying $30 billion, and it’s outrageous what that is, because they’re swapping $30 billion for these securitizations that we know are not worth the par value that they’re saying that they’re worth. So it’s really a grant to Bear Stearns and basically to JPMorgan Chase, who is getting a fire-sale price for buying Bear Stearns.
AMY GOODMAN: Bruce Marks, what should happen?
BRUCE MARKS: What should happen is that if we’re going to have to bail out the Bear Stearns, which we disagree — you shouldn’t use taxpayer money for that, but if that’s going to happen, there’s got to be a quid pro quo. You’ve got to work with — deal with the cause of the problem. And the cause of the problem is homeowners losing their homes with a defective mortgage. So you have to stop the resets, stop the interest rate increases, roll them back to the initial rate that people were qualified for, and put a moratorium on foreclosures, and then make sure that you can restructure those loans, meaning to permanently reduce the interest rate to a mortgage payment that the homeowners can afford.
And through NACA, we’re able to do thousands — we’ve done thousands of those loans for the borrowers. So what we say is, we look at what someone can afford, their net income, their expenses, determine what mortgage payment they can afford, and we have agreements with Countrywide and with Citigroup and others that they restructure the loans to make it affordable.
AMY GOODMAN: How have you been able to do this for thousands of homeowners?
BRUCE MARKS: Well, we did it through — we had to get their attention, so it’s through the advocacy. You know, I mean, we’ve got over 550,000 members around the country. NACA is a non-profit advocacy organization and mortgage broker. So if you come through NACA, you can get a mortgage that is the best deal out there. So it’s at no down payment and no closing cost and no fees, and it’s always one product. And today’s rate is five percent fixed, thirty-year fixed. So anybody can get that and go to our website, naca.com. But it’s through the advocacy.
So the protest today at 12:00 in front of the Bear Stearns and the JPMorgan corporate centers is going to be “stop the bailout, work with the homeowners to keep them in their homes,” because only through demonstrations and protest that can we do that. So we’re asking anybody, if you’re at risk of losing your home, come down today to the corporate center at JPMorgan Chase and join in the protest. Do the sit-ins. Let’s take them on and say to Secretary Paulson, say to the government: stop bailing out the people, the predators, who created the problem and profited from the problem.
AMY GOODMAN: Their offices are at 47th and Park Avenue?
BRUCE MARKS: Yes.
AMY GOODMAN: You wrote a piece in the Boston Globe called "Lenders Should Bail Out Consumers." How?
BRUCE MARKS: Because they’re the ones — the lenders are the ones, and investment bankers are the ones that — they created the problem. They profited from the problem. And remember, they provided billions of dollars in bonuses to their executives. So the way that they solve it is to restructure the loans, is to say let’s go back and do the lending the way it should have been done the first time: determine what someone can afford, lock in an interest rate and a payment over the remaining term of the loan — go back and restructure them the way it should have been done.
AMY GOODMAN: Do you see any of the presidential candidates addressing this issue satisfactorily?
BRUCE MARKS: Well, you know, you will see Hillary out there saying that, you know, that they should do the moratorium, you know, on the foreclosures. So you’re starting to see that. And this is going to be, is becoming and is going to be the number one issue in this country in the political debates, in the discussions that are out there, because, you know, now this administration has really endorsed corporate socialism, you know, that now we’ve got the issue that they don’t allow corporations to fail by their bad judgments. So the fact of the matter is, they’ve opened up that box that says now let’s do the right thing for the homeowners, hardworking people. So the fact of the matter is, we’ve got millions of people at risk of losing their homes, and it’s only going to get worse.
AMY GOODMAN: I want to thank you for being with us.
BRUCE MARKS: Thank you.
AMY GOODMAN: Bruce Marks is the CEO and founder of NACA, the Neighborhood Assistance Corporation of America. He will be in front of the corporate offices of Bear Stearns today at noon in New York.