Friday, January 27, 2006

The Whitening of New Orleans Using the Bleach of the Almighty Dollar

I guess, technically, today's news from the New York Times predicting New Orleans' racial future is not a shock, if for no other reason than Black people collectively aren't stupid. But nonetheless, today's news is different -- because It's Almost Official:

The City of New Orleans is on its way to, henceforth, becoming a majority white city. It is being whitened it in a way that long-standing real estate speculation efforts, government sponsored redevelopment and long-standing always just-under-the-surface anti-Black racism never could. According to today's New York Times:

Of the 354,000 people who lived in New Orleans neighborhoods where the subsequent damage was moderate to severe, 75 percent were black, 29 percent lived below the poverty line, more than 10 percent were unemployed, and more than half were built"

This type of data has led Brown University's researchers to conclude that up to 80% of New Orleans' Black population might not return.

Of course, it's all about money: from Mayor Nagin's cruel four-month "use it or lose it" ultimatum to the most damaged low income neighborhoods -- a cruelty so obvious because it both established an unrealistic deadline and denied building permits -- that IMO it is a major reason that Nagin felt scared enough about his plummeting standing with the Black folks who put him in office that he needed to reassure folks that New Orleans would again be a Chocolate City on MLK Day.

That making money off Katrina misery, whether through formal "rebuild programs" that give no realistic chance, to even more facially "fair programs" like the rebuild plan proposed by Representative Baker and rejected by the Bush has now become the name of the game then there are the financial horror stories that are not yet being told by the mainstream press.

Such as the increasing stories of the "adding insult to injury" cruelty of subprime mortgage lenders. (I affectionately refer to them in my law practice as "bottom feeders".) Subprime mortgage lenders are, historically and presently, a major scourge on African-American homeowner communities nationwide. New Orleans pre-Katrina, was no exception. It was estimated that more than 26% of all mortgages held in African-American parts of New Orleans were held by subprime lenders.

Anyone who knows that business knows that this was a recipe for disaster that could only be accelerated by Katrina. Even though most of the bottom-feeder lenders, like Wells Fargo Financial, CitiFinancial, and Chase Home Mortgage (all of who ultimately cleaned up their initially discriminatory Katrina acts, but only after low-income consumer advocacy groups like ACORN and ICP stepped up) are shills: subprime lending arms of major banks.

It is not widely known that most of the subprime lenders initially originally offered far less help to Katrina victims holding subprime mortgages than they did to their "regular" banking customers. For example, until it was called out, Wells Fargo Financial originally provided Katrina forbearance relief only if a WFF customer *asked* for help. Others, like CitiFinancial (subsidiary of CitiBank) and Chase Home Loan (subprime arm of Chase Manhattan Bank) offered only 30 or 60 days forbearance plans -- again upon request, as opposed to the automatic forbearance these same banks gave to their mainstream customers -- instead of the default, 90 days offered to prime borrowers (and now offered by all, thanks to consumer advocacy groups). But now, the lenders are trying to eat the icing on the cake of their subprime mortgage targeting, in connection with Katrina.

So there are stories. Stories of subprime lenders nailing Katrina homeowner victims who wanted to fully pay off their mortgages using their insurance settlements with a demand for their contractual prepayment penalties -- punishment money that only subprime, already high-interest paying borrowers are ever forced to suck up in the first place as a condition of getting a loan. (I cannot overemphaize that punishing a homeowner for *paying a high interest loan early* is a nothing more than a guaranteed windfall for subprime lenders: they either get tens of thousands of dollars in free equity skimming, or they trap poor homeowners who don't wish their equity skimmed into bad financial terms). In this context, they are instant, sheer 100% legal profit off a Katrina victim's misery. Stories of subprime lenders offering forebearance agreements that looked nice in theory under the immediate stress of Katrina, but in the light of day now appear to guarantee the ruination of a Katrina victim's credit rating and loss of the very home they were trying to save if they cannot immediately make a 4-month balloon payment. Stories that, but for zealous advocacy by groups like ACORN and ICP, would have led to brand new tragedies for homeowners who have already boundlessly suffered at Mother Nature's hand (as aided by federal government incompetence).]

Stories that the mainstream media has not yet reported.

When you learn of these quiet stories in light of last month's welfare offer to homeowners to have them sell their homes -- what I call the "3/5th of a House for 3/5 of a Man Plan -- it just begs the question asked by Professor Logan, Brown University lead researcher:

The continuing question about the hurricane is this: Whose city will be rebuilt?"

A perfectly legitimate question, the answer to which has the capacity of bringing great comfort or great anger to large numbers of people. Perhaps trying to stave off the latter, the Times runs to the technically "centrist" but unquestionably capitalist Establishment think tank, the Brookings Institution, to reassure the masses that the 80% figure is "just" a "worst case scenario" even it concedes that it is a viable scenario in the next six months if something is not done.

I guess we're supposed to be comforted that the racial handwriting on the New Orleans wall isn't going to be in indeliable ink for another six months.

So I don't see any basis for comfort, especially now that the Bush Administration's has rejected out of hand the admittedly expensive, yet locally-supported even though possibly flawed "3/5 of a House for 3/5 of a Man Plan" advanced by Rep. Baker for rebuilding New Orleans. While potentially deeply flawed, as I blogged previously, the Plan at least tried to partially preserve homeowner equity, the foundation necessary to rebuild the future for Katrina victims.

But the Baker Plan has been jettisoned out of hand by the Bush Administration, on the grounds of the Almighty Dollar.

In his press conference yesterday, Dubbya completely evaded the legitimate question about the impact that the Administration's summary rejection of the Baker Plan might have on restoring New Orleans' poor population. Well, except for where Bush admitted that stuff said earlier about rebuilding New Orleans was needed to be "said early on" to "reassure" people. And except for taking credit for the "$85 billion" authorized by Congress for "Gulf Coast Relief" (even if only $29 billion has actually been appropriated in the budget and only $6.2 billion in CDBG block grants has actually been allocated so far for New Orleans) and emphasizing that the maximum -- assuming it is ever actually spent -- is "a lot of money".

Given the data analyzed in the Brown University study, the fact that the mass foreclosure train appears to have left the station, and the fact that currently only $6.2 billion has been provided to begin to offset what are estimated to be nearly $125 billion in losses, I'm afraid that we can increasingly be certain of the answer to Professor Logan's question:

Not Ours.


At 2:21 PM, Anonymous Anonymous said...

HUMOR–There is an alternative "rebuilding plan" on



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