Tuesday, December 31, 2013

And the Piggy Award 'honor' goes to... bankers (again)

from detroitnews.com

Despite a litany of fines, mortgage service abuses continue

Brian J. O’Connor
47 Comments

The end of the year is a time to review the year that just was. If, like me, you write about the financial services industry, this means you tend to find yourself drinking heavily and/or upping your blood-pressure medication as you total the year’s supply of vile shenanigans unleashed on innocent financial consumers.

Instead, I choose to vent my wrath in the annual Funny Money Piggy Banker Awards or, for short, “The Piggies.” These awards honor the most swinish, selfish and greedily pig-headed anti-consumer practices by banks, credit card firms and other lenders, along with their bought-and-paid-for legislative protectors.

Usually, it’s a depressing litany of jacked-up fees, sleazy hidden surcharges, frustrating customer non-service, and the many underhanded tricks bankster swine use to rig the U.S. financial system so they can steal your money. We have many deserving candidates among the undeserving hucksters, but this year, one segment has completely out-soiled the rest. So here we go with the 2013 Piggies: Mortgage Bankers Special Edition.

The mortgage bomb

In case you missed it, during the housing boom mortgage bankers (and their porcine brethren in investment banks) sold a bunch of gullible consumers mortgages they couldn’t afford. The banksters knew this, but didn’t care, because they pushed the lousy loans onto investors. Everybody figured someone else would get stuck paying the bill.

That someone was us. And the world economy, which was hit with the worst economic downturn since the Great Depression. Four years after the official end of the recession in the U.S., we still had 10.9 million workers out of a job during November, including more than 4 million who’d gone without a paycheck for more than six months.

Thanks to the recession they didn’t create, millions of innocent homeowners with completely decent, affordable home loans lost their jobs, then lost their homes to foreclosure. The do-nothing Obama administration trotted out a sham foreclosure prevention program that, according to a warning in 2010 from a special inspector general, actually created new foreclosures.

Foreclosure + misery = profit

The reason was that banks figured out that their mortgage servicing departments made more money on foreclosures than by preventing them. Yes, even though bankers are quick to claim, “We don’t want to foreclose,” they were lying, which we should have known, because their lips were moving. Nonetheless, five huge banks — Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo — agreed to pay $26 billion in fines in a 2012 deal over foreclosure abuses with nearly every state plus the Justice Department.

That came on top of a previous settlement with 13 mortgage servicers that called for reviewing more than half a million botched or illegal foreclosures in 2009 and 2010. After two years of review, by the way, consultants got $2 billion and homeowners got nothing. So another deal was hatched to send $3.6 billion to the wronged borrowers earlier this year.

So, now everything is cool?

Of course not.

That $3.6 billion deal? The first round of checks issued for “relief” bounced. Then, in May, the consulting company issuing the checks short-changed more than 100,000 victims. And the kicker: 568,476 borrowers got just $300 each.

That’s right. Under neither deal did wrongly foreclosed homeowners get back their homes, or the value of their lost homes plus damages. In the bigger national deal, nearly all of the money went to help future foreclosed homeowners, veterans and to repay states for their investigation. And the banksters get to write off almost all of it on their corporate taxes.

But at least they’ve mended their ways, learned their lessons and handle foreclosures properly now, right?

Not really.

Still feeding at the trough

In October, New York state sued Wells Fargo, saying it wasn’t adhering to the terms of the settlement, and threatened to sue Bank of America, until the bank — once again — agreed to stop violating the agreement. In December, the office overseeing the national mortgage settlement reported that more than half of the banks involved — Citibank, Bank of America and JPMorgan Chase — were still failing to treat troubled borrowers fairly.

And if you thought that $26 billion would be enough to scare other mortgage servicers straight, think again. Also this month, the Consumer Financial Protection Bureau, 49 states and the District of Columbia ordered $2 billion in penalties against the largest nonbank mortgage servicer in the country, Ocwen Financial Corp. Ocwen must also refund $125 million to more than 180,000 wrongly foreclosed homeowners.

According to Ocwen’s most recent financial filing, that $125 million refund equals about six weeks of what the company collects just in loan servicing fees.

By the way, banks are subject to fines of up to $5 million if they fail tests under the foreclosure settlement. None have been fined to date. So if your hear those mortgage banksters squealing, remember that it’s not from any real pain inflicted by our legal system or our elected representatives. It’s from delight.

boconnor@detroitnews.com
(313) 222-2145
“The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese” is Brian O’Connor’s humorous guide to budget-cutting. Now available at www.bit.ly/1000order

From The Detroit News: http://www.detroitnews.com/article/20131230/BIZ01/312300026#ixzz2p7QmzglN

Saturday, December 28, 2013

Richmond Battles Banksters to Save Homeowners from Foreclosure

from indybay.org

by Jonathan Nack
Friday Dec 27th, 2013 11:58 PM

Photo by Jonathan Nack
Rally in Support of City of Richmond's plan to Save Homeowners from Foreclosure
City Hall, Richmond, CA
December 17, 2013

800_dscf3236.jpg
original image ( 2272x1704)

Richmond Battles Banksters to Save Homeowners from Foreclosure

By Jonathan Nack
December 27, 2013

OAKLAND – The City of Richmond, California voted to continue its groundbreaking effort to save resident homeowners from foreclosure on December 17, 2013. The Richmond City Council voted 4 to 2 in favor of moving forward with its plan to use its right of eminent domain to protect homeowners and to, "prioritize those neighborhoods that have been particularly hard hit by the housing crisis"

The San Francisco Chronicle reported that Richmond could invoke eminent domain for underwater mortgages by uniting with another city in a Joint Powers Authority - even without getting a super-majority of the City Council to approve the controversial idea. More than half of homeowner mortgages in Richmond are said to be underwater.

Opponents of the plan seek to block its implementation by relying on the city's charter, which requires a super-majority to invoke eminent domain. The Council is currently divided, with four members supporting Mayor Gayle McLaughlin's plan and three opposing, which is short of a super-majority.

Banks and Realtors oppose the concept, saying it is unconstitutional and would drive up lending costs in the city. They've run a well-financed campaign attacking the plan, and are poised to launch a fierce court battle against it, according to The S. F. Chronicle.

The Contra Costa Times reported that the resolution adopted directs city staff to step up efforts to partner with other cities in a possible Joint Powers Authority.

"To keep my support, we need ensure we have partner" cities, Councilman Jael Myrick said. "Other cities cheerleading Richmond is fine, but let's be honest here, Richmond needs other cities to reduce the risk," he told The Contra Costa Times.

Prior to the December 17 Council meeting, approximately seventy-five supporters of Richmond's initiative rallied in from of Richmond City Hall. Later, at the City Council meeting, a majority of approximately forty speakers spoke in favor of moving forward.

For more information:

Richmond’s Neighborhood Stabilization Plan moves forward against realtor opposition
http://sfbayview.com/2013/richmonds-neighborhood-stabilization-plan-moves-forward-against-realtor-opposition/

Also, courtesy of David Solnit:

Richmond pushes forward with eminent domain plan
http://www.sfgate.com/realestate/article/Richmond-pushes-forward-with-eminent-domain-plan-5073950.php

Richmond’s controversial housing plan takes step forward
http://richmondconfidential.org/2013/12/18/richmonds-controversial-housing-plan-takes-step-forward/comment-page-1/

Richmond’s Eminent Domain Plan Moves Another Step Forward
http://abclocal.go.com/kgo/story?section=news%2Flocal%2Feast_bay&id=9365232

Richmond council modifies eminent domain plan, but prospects still in doubt
Contra Costa Times
http://www.contracostatimes.com/west-county-times/ci_24742690/richmond-residents-council-set-grapple-again-eminent-domain

Northern California city takes step toward adopting eminent domain to halt foreclosures
Associated Press
http://www.therepublic.com/view/story/454bc826b3854febb041610b41e691bf/CA--Foreclosure-Eminent-Domain

Monday, December 16, 2013

How Elizabeth Warren is scaring the banksters

from rt.com

December 14, 2013 07:00

U.S. Sen. Elizabeth Warren (D-MA) (AFP Photo / Alex Wong)

Download video (412.56 MB)

Tonight’s “Big Picture Rumble” discusses the latest school shooting in Colorado, Connecticut, taking the lead on labeling GMOs and how Sen. Warren is scaring the banksters. In tonight's “Conversations with Great Minds" Thom talks with First Amendment attorney, James C. Goodale, author of the new book“Fighting for the Press.”

Icelandic 'banksters' get jail time over Kaupthing fraud

from rt.com

Published time: December 13, 2013 13:20

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Reuters / Bob Strong

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Big banks get off cheaply

In the scrutiny of the world’s key lenders for so-called “pre-crisis cheating” European and American banks have so far got off cheaply when compared to Icelandic lenders.

Although some of the worlds’ biggest banks will need to pay record fines, the penalties imposed by regulatory bodies have all been monetary, and the bank bosses have remained off the hook.

Last week the European Commission hit six major banks with record fines of 1.7 billion euro for manipulating lending rates that play a key role in the global economy. In November JPMorgan Chase & Co., that has been penalized the most, agreed to a record $13 billion settlement for selling "bad loans" before the US financial crisis.

Monday, December 9, 2013

International banksters stole our country

from poconorecord.com

December 08, 2013

Editor, the Record:

It's been 100 years since those criminals in the federal government exercised powers not delegated them by the Constitution for the United States of America when they conferred upon a private cohort of international banksters control of our nation's money supply. Our country was abducted from us by these internationalists; since then, the American people were sold the lie that "everything is all right," "we're still a free country" and other mindless blather.

No, everything is not all right. You have been living a lie. The dementia must end.

Through this multi-generational conspiracy, the banksters first separated us from our lawful gold coin in 1933, silver in 1964, and, in 1971, Nixon closed the gold window. There has since been no check upon this legalized counterfeiting operation. Jefferson's prediction is proving true "...the banks... will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered..." Our country's future may likely mirror that of the Weimar Republic in Germany following World War I — hyperinflation followed by dictatorship.

At this point, writing your elected official, even voting, is a pure exercise in futility. The crux of the problem is holding public officials accountable when they act outside the law.

Make this your New Year's resolution: Learn your rights; memorize the Bill of Rights by heart. Purchase a fifth or sixth edition of Black's Law Dictionary, as well as a reprint of Noah Webster's "1828." Words have different meanings.

Purchase both state and federal rules for criminal and civil procedure. Make yourself familiar with the U.S. Code, as well as Pennsylvania Consolidated Statutes. Visit westudylaw.org. Learn the law and stand your ground.

As someone once said, "If this is a game of chess, then we're going to learn how to play chess very well."

GARY RONALD LEWIS

Stroudsburg

Sunday, December 8, 2013

Near a Vote, Volcker Rule Is Weathering New Attacks

from nytimes

BY MATTHEW GOLDSTEIN AND BEN PROTESS

Even as five regulatory agencies prepared to vote Tuesday on a regulation that seeks to rein in risk-taking on Wall Street — an effort known as the Volcker Rule — lawyers and lobbyists were gearing up for another round of attacks against it.

In recent letters and meetings with financial regulators, lobbyists for Wall Street banks and business trade groups issued thinly veiled threats about challenging the Volcker Rule in court, people briefed on the matter said. The groups, including theU.S. Chamber of Commerce, are hinting that they could use litigation to either undercut or clarify the rule, which is intended to bar banks from trading for their own gain and limit their ability to invest in hedge funds.

The rule, a cornerstone of the 2010 Dodd-Frank Act and a barometer for the overall strength of the regulatory overhaul, is aimed at preventing future trading blowups on Wall Street. In July, Treasury Secretary Jacob J. Lew instructed the agencies drafting the Volcker Rule — the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Comptroller of the Currency — to complete their work by year’s end.

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Over the past few months, the agencies overcame internal squabbling to draft identical versions of the rule, according to the people briefed on the matter, who were not authorized to speak publicly, and have scheduled votes for Tuesday. The agencies came together to write a tougher-than-expected final text despite two years of persistent prodding and pushing from Wall Street lobbyists to water down major provisions of an October 2011 draft version.

Wall Street also urged them to slow down, even as banks prepared to comply with the regulation. In a Dec. 4 letter to the heads of the five agencies, the U.S. Chamber of Commerce, the Business Roundtable and three other business trade groups wrote, “It is more important to get the Volcker Rule right than meet an artificially imposed deadline.”

But the Chamber is unlikely to rush into court. The Federal Reserve will delay the effective date of the rule to July 2015, the people briefed on the matter said, a move that will probably postpone any litigation for several months while bank lawyers study the rule’s nuances.

Still, Wall Street is wasting no time to find end runs. Come Tuesday, hundreds of lawyers will pore over the details of the final draft, searching for loopholes and outlining for banks how they can comply with the law while still taking risks. One big law firm is installing extra printers in its conference rooms to print out multiple copies of the rule.

Some banks like Goldman Sachs have already test-run certain strategies, such as putting together a separate investment vehicle to make loans to companies in the event the regulation limits the ability of bank-owned hedge funds to continue that business.

“Morgan Stanley and Goldman Sachs will go out and hire the best and brightest lawyers, and they will say, ‘How do we do this?’ ” said Bill Singer, a securities lawyer who represents individuals and brokerage firms in disputes with regulators and advises clients on regulatory compliance. “The mind-set,” he said, is “how do we get around it?”

That said, Wall Street is also throwing resources into compliance. Banks are writing new compliance manuals, training their traders and rewriting computer programs that effectively automate whether a trade is out of bounds under the Volcker Rule.

Even opponents of the rule, who question the benefit of a ban on trading by banks for their own gain — a practice known as proprietary trading — privately concede that banks will adjust to the vast majority of its requirements. Further smoothing the transition, banks like Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley have already complied with large swaths of the rule, shuttering stand-alone proprietary trading desks months or years ago after Dodd-Frank passed Congress.

But because there was a limit to what Wall Street could do without a completed rule, Tuesday’s vote will at least bring some finality to the behind-the-scenes discussions.

“Compliance will be daunting, but hopefully the waiting will have been the hardest part,” said Lisa M. Ledbetter, who said she was one of about 200 lawyers at Jones Day who will review the rule on Tuesday on behalf of the firm’s Wall Street clients. “The devil is in the details.”

With the Volcker Rule, which officials say is about 70 pages long with a preamble of nearly 900 pages introducing and interpreting the rule, the details will be numerous.

The rule is the brainchild of Paul A. Volcker, a former Federal Reserve chairman and adviser to President Obama who wanted to outlaw proprietary trading by banks that enjoy deposit insurance and other government support. Such a ban, Mr. Volcker reckoned, would curb risk-taking and avert future bailouts of Wall Street.

But there is not a bright line between proprietary trading and the legitimate practices that are allowed under the rule. For example, banks will still be allowed to buy stocks and bonds for their clients — a process known as market-making. They can also place trades that are meant to hedge their risks, a practice that is hard to distinguish from proprietary trading.

In recent weeks, according to the people briefed on the matter, the C.F.T.C. and Kara M. Stein, a Democratic commissioner at the S.E.C. who favors a strict Volcker Rule, pushed to close potential loopholes. Gary S. Gensler, the chairman of the C.F.T.C., argued for new language that would prevent banks from amassing large amounts of stock under the guise of market-making.

The final draft adopted many of their suggestions, the people said, requiring banks to meet tougher-than-expected measures for determining whether a trade is proprietary or market-making. Some require daily calculations from the banks. The measures, the people added, also force the banks to evaluate whether they are holding, say, thousands of shares in Facebook, based on “historical demand” from customers. If not, then regulators would deem the position proprietary and improper.

The rule will also require bank chief executives to attest that they are not doing proprietary trading, officials say, another victory for the rule’s supporters.

But it would still be up to the banks to police their compliance with the rule.

Representatives for Goldman Sachs and Morgan Stanley said it was premature to comment on a regulation that has yet to be approved.

A spokeswoman for the U.S. Chamber of Commerce, Lisa Burgess, said that the trade group had “deep concerns” about the process that led to the Volcker Rule but that it was too soon to say whether the organization would sue the regulators.

In pursuing courtroom battles against Dodd-Frank — federal agencies have been sued at least six times over recent rules — the Chamber and other trade groups have used a standard formula. They typically hire Eugene Scalia, a seasoned litigator at Gibson Dunn and the son of Justice Antonin Scalia, to lead the litigation. And to underpin the case, they scrutinize whether regulators fully weighed the costs and benefits of a rule.

The Volcker Rule is not expected to have a stand-alone cost-benefit section, the people briefed on the matter said, a decision that the Chamber might emphasize in a lawsuit. But regulators believed there was no need for such a section because they wove in cost considerations throughout the document and were drafting the rule under a federal statute — the Bank Holding Company Act — that does not require a cost-benefit analysis.

The Chamber might also seize on a provision in the Volcker Rule that would curtail the ability of banks to engage in portfolio hedging, a type of trading that critics say goes beyond normal hedging of positions for either the benefit of clients or mitigating the bank’s own risk. The provision is a response to the “London Whale” trading debacle that resulted in $6.2 billion in losses for JPMorgan Chase.

In a Nov. 25 letter to the regulatory agencies, a trade group with ties to the Chamber said that any provision aimed at restricting portfolio hedging would be improper since it was not included in the draft version of the Volcker Rule. The group argued that “expanding the Volcker Rule, to include portfolio hedging, without public comment, does not allow businesses to either consider the implications or communicate to regulators how capital formation will be affected.”

But Wall Street critics contend the banks and trade groups were put on notice that regulators might put restrictions on portfolio hedging because it was one of the nearly 400 questions regulators asked for comment on when they published the October 2011 draft.

Some bank lawyers also argue that with Wall Street working to meet the terms of much of the Volcker Rule, the most contentious issues in the measure will probably not take as much time to resolve as some suggest.

“Within a year or two, people will have a sense of how the regulators expect the rule to be implemented” said William J. Sweet Jr., a bank regulatory lawyer at Skadden, Arps, Slate, Meagher & Flom.

Jessica Silver-Greenberg contributed reporting.

Thursday, December 5, 2013

On the News With Thom Hartmann: Banksters Could Be Forced to Pay Billions for Crashing the Economy, and More

from truth-out

In today’s On the News segment: The banksters could be forced to pay tens of billions of dollars more in settlements for crashing our economy; typhoons are spreading the nuclear fallout from Fukushima; Colorado may be the next state take on the GMO industry; and more.

Thom Hartmann here – on the news...

You need to know this. The banksters could be forced to pay tens of billions of dollars more in settlements for crashing our economy. But, these fees are just a small fraction of the price that American taxpayers paid for the economic collapse. So far, the too-big-to-fail banks have forked out about $80 billion dollars in legal fees related to the crisis, and the ratings agencies predict that the banksters will be on the hook for another 50 to 100 billion. Although that sounds like a lot, it's simply a drop in the bucket compared to the $6 trillion dollars that their gambling cost our economy. And, many of these settlements were so-called "no-admit-no-deny" agreements that did not even require the banksters to admit to their crimes. To make matters even worse, many of these settlements could be written off of banks' taxes, which means that the actual amount that banksters are responsible for is even less than that $80 billion. The vast majority of the cost of the last economic collapse fell to the taxpayers, and the too-big-to-fail banks have been able to consider their fees as just another cost of doing business. And, most of our lawmakers aren't doing much to prevent the next crash, let alone hold the banksters accountable for the last one. As Senator Elizabeth Warren says, the system is rigged, and Americans are fed up with the banking oligopoly. If we want any chance at stopping the next economic meltdown, we must break up the banks, and start throwing the banksters in jail for their crimes.

In screwed news... Typhoons are spreading the nuclear fallout from Fukushima. Recent storms that brought high winds and heavy rains have pushed more radiation out to sea, and spread soil containing dangerous levels of cesium. A joint study by Tsukuba University and France's Climate and Environmental Science Laboratory found that typhoons washed away contaminated soil and deposited it in rivers and stream. Those waterways then transported radiation into the ocean. Although scientists have conducted various studies on Fukushima since the 2011 tsunami, this is the first study to consider how strong weather events effect the spread of radiation. The results of this study underline the ongoing problems at the Fukushima nuclear power plant, and the overall danger of nuclear energy. There is no way to completely contain the fallout from this ongoing disaster. The only way to prevent more disasters is to eliminate nuclear power. No nukes!

In the best of the rest of the news...

Colorado may be the next state take on the GMO industry. The GMO-labeling advocacy group, Right to Know Colorado, has submitted a ballot initiative to put the measure before voters in 2014. If they succeed in collecting the 85,000 signatures needed to put GMO-labeling on the ballot, Colorado will be the third state to attempt a food labeling initiative. Unfortunately, corporate interests led to the GMO-labeling measure being narrowly rejected in Washington state in November, and being voted down in California in 2012. Right to Know Colorado says its mission is "built on the foundation that we have the basic right to know what is in our food and what we are feeding our families." Hopefully voters won't let corporations get in the way of Right to Know Colorado's important goal.

According to RadCast.org, radiation levels in some areas of our nation are slightly higher than they were yesterday, and some areas are holding steady. Near the East coast, Charleston, West Virginia is up to 46 counts per minute, from yesterday's 44, and Philadelphia is up to 49, from yesterday's 43 counts per minute. In the Midwest, Frederic, Wisconsin was 49 counts per minute yesterday, but today they're reporting levels of 57. Colorado Springs actually went down a bit to 54 counts per minute. In the Southwest, Henderson, Nevada jumped from 47 to 55 counts per minute, but Tuscon, Arizona went down to 47 counts per minute, from yesterday's 49. Near the West coast, Seattle, Washington increased slightly from 31 to 33 counts per minute, and Fresno, California dropped from 42 to 39 counts per minute. RadCast.org reminds us that their alert level is 100 counts per minute, and they're monitoring levels around our nation to keep us informed.

Less than one week after 1,500 Black Friday protests at Walmart, fast-food workers are joining the fight for a living wage. Workers in more than 100 cities will stage a one-day strike this Thursday, making the walk-out the largest such event since the movement began one year ago. Fast-food workers are demanding a raise to $15 dollars an hour, and the right to organize as a union. On average, these employees earn less than $9 dollars an hour, and they aren't all just teenagers – as many of those on the Right try to claim. Their wages are so low that fast-food workers need more than $240 billion dollars in public benefits just to survive. Workers in the retail and fast-food industry are realizing that they have more power by standing together, and together they are standing up to corporate greed.

And finally... In 2011, the United States Post Office issued new "forever" stamps featuring the original Statue of Liberty – or so they thought. The stamps may actually featured a picture of a replica located in front of the New York-New York casino in Las Vegas. And, the creator of the replica is suing the Post Office, claiming he can identify his creation because it was only inspired by the original Statue of Liberty, saying his is more "fresh-faced" and "sultry" than the real thing. It's easy to understand how someone could mix up the two images, but the replica in Las Vegas features a slight smirk and a "more feminine form." And, in place of the original text welcoming the "tired and poor," the Las Vegas statue's plaque reads "This One's For You Mom." No word on whether the lawsuit will move forward, but hopefully the post office looks more carefully before printing any stamps featuring the sphinx, the pyramids, or the Eiffel Tower.

And that's the way it is today – Tuesday, December 3, 2013. I'm Thom Hartmann – on the news.

This article was first published on Truthout and any reprint or reproduction on any other website must acknowledge Truthout as the original site of publication.

Tuesday, December 3, 2013

The Banksters Are Now Setting Up the Crash of 2016

from truth-out.org

(Image: <a href=" http://www.flickr.com/photos/42269094@N05/4039479477/in/photolist-79XovT" target="_blank"> Lance Page / t r u t h o u t; Adapted From: woodleywonderworks / Flickr</a>)

(Image: <a href=" http://www.flickr.com/photos/42269094@N05/4039479477/in/photolist-79XovT" target="_blank"> Lance Page / t r u t h o u t; Adapted From: woodleywonderworks / Flickr</a>)

As the great Yogi Berra once said, "it's déjà vu all over again."

Right now, millions of Americans are still struggling to recover from the 2008 financial collapse.

That collapse was fueled by the housing crisis, when Wall Street banksters were running around betting on risky mortgage-backed securities that they could sell to investors and make billions from.

They were able to do that because the Graham-Leach-Bliley Act and the Commodities Futures Modernization Act had blown up rational banking regulations, and, as a result, we saw things like the so-called mortgage "liar loans".

Banksters were able to turn billions of dollars in risky mortgages into trillions of dollars in derivatives.

And then everything went to hell.

Fast forward to today, and because of Dodd-Frank there are no more "liar loans."

Banksters can't run the same scam as they did during the housing crisis.

So, they've found a new way to come up with real-estate-backed securities that can be turned into derivatives, worth billions in profits.

How? They've become landlords.

As Marilyn Volan points out over at TomDispatch, in the past year and a half, banksters in Wall Street hedge funds, big banks and private equity firms have purchased hundreds of thousands of mostly-foreclosed houses across the country.

Among the firms and big banks buying up America's real estate is the Blackstone Group, the largest private equity firm in the world. The Blackstone Group alone has bought nearly 40,000 houses across America, spending $7.5 billion in the process.

Blackstone, for example, bought 1,400 homes in Atlanta in one day, and owns nearly 2,000 houses in the Charlotte, North Carolina metro area.

So why are Blackstone and other Wall Street firms buying up foreclosed homes all across the country?

It's simple.

By renting these homes back to Americans, and securitizing America's home-rental market, they can bundle up rental payments the same way they used to bundle mortgage payments, and sell them to investors.

Sounds awfully familiar, doesn't it?

Blackstone alone has partnered with several of America's largest banks, to bundle the rental payments of over 3,000 homes. And they're just getting started. Last month, Blackstone released the first -ever rated bond completely backed by securitized rental payments, and, sure enough, investors rushed to get in on the action.

When this latest get-rich-quick scheme by Wall Street blows up, the big banks and financial institutions will be just fine, like they were in the aftermath of 2008. Because they leverage these things so much, they have very little skin in the game.

Instead, you and I will again face the consequences of their actions.

Thousands of Americans will again find themselves on the streets, looking for a place to call home, and our economy will be shattered.

We could see a housing and financial collapse that makes the Great Recession look mild.

This is something I talk about in my new book, "The Crash of 2016."

The basic premise of my book is that conservative lawmakers overreacted to the progressive changes in America that took place in the 1960s and 70s.

That overreaction, which included massive deregulation and tax cuts, opened the door for predators – particularly predatory banksters – to step in and wreak havoc on our economy.

And, as we see with Wall Street's new efforts to turn rental homes into cash-cows, that door hasn't been closed.

The predators are again up to their old tricks. Nothing has changed.

Elizabeth Warren was right when she said that the system is rigged.

And if we don't unrig the system quickly, we're going to see another disaster very, very soon.

This article was first published on Truthout and any reprint or reproduction on any other website must acknowledge Truthout as the original site of publication.