Photo: Copyright © Antonio carlos cascatrina, Getty Images.
I remember when I took an economics course in college. It was tedious at best. The only takeaway from it was the paradigm of supply and demand. A concept easily understood without having to employ the complicated formulas and skills needed for mathematics. Don’t get me wrong, I really dig math but when not applied for many years it becomes akin to deciphering Egyptian hieroglyphics. I, nevertheless, have a preference for concepts over formulas.
I, by no means, am an economist. My eyes respond more to colors as my ears to sounds- far more than it does to trends in spending. But it doesn’t exempt me from the fallout of an economy in decline that still has mixed outcomes for people of color in comparison to their white counterparts.
When I worked for the National Council of Churches of Christ in the USA in New York City, I witnessed the whitening of the office pool. It was a direct response to the shrinking economy. Management tried to break the union with their attempt to pressure them to tighten up their ranks by letting go of a number of individuals. This, a by-product of their mismanagement, was the usual plantation set-up where management was 97% white and the union members (usually support staff) were 99% people of color. Despite claims of not having money, they managed to find six figures to pay cronies to do work they were not qualified for. And when they failed miserably at it, they were placed in another management position with a large portion of their salary intact. All of this on the backs of the numerous union members sacrificed for the sake of one.
During that period, it seemed like the money supply dried up slowly and steadily like the desiccation of fertile land. George W. Bush handed over a country tottering on the edge of economic collapse initiating what could be termed as the Great Depression 2.0… a very scary period. All of the financial cushions that were set in place were slowly eroded. Resources, like the equity line of credit I had in case of that ‘rainy day,’ were plucked from my account like a thief in the night absconded with the funds leaving me, like many others, exposed to the oncoming storm.
Many of the economic policies that resulted in toxic mortgages and unregulated transactions contributed to the financial crisis. This gave rise to the Dodd-Frank regulatory reform of 2010 that put in place much-needed regulation of Wall Street and the banking industry. The economic downturn created the perfect storm for the rise of the cottage industry of mortgage management companies. Bank mortgage activities were transferred into the hands of these unregulated companies, in my case, Ocwen Loan Servicing.
The Financial Protection Bureau fined Ocwen $2.2 billion for its deceptive practices. “We believe that Ocwen violated federal consumer financial laws at every stage of the mortgage servicing process,” said Richard Cordray, the director of the bureau. He went on to say, “Ocwen made troubled borrowers even more vulnerable to foreclosure.”
(Don’t take my word for this; take the time to look it up on the Internet. It’s public information.)
In my case, they tried to create a wall of debt that would result in the loss of my property. My intention was to modify my loan. Instead, they pushed products on me that were not requested without fully disclosing the details. However, they had no idea I was on to them from the start. They deceptively use customer service reps in India who have no context to what is going on.
They tried to play bait and switch; their acquisitions were nothing more than a name change for the same company. Following is an excerpt summarizing what became a successful battle against their deceptive practices:
As a customer of the following servicing companies: Countrywide, Option One, American Home Mortgage Company, Homeward, and Ocwen, I have enough experience with them to surmise that they’re not only servicing the mortgage, they’re making a profit from our relationship with questionable and egregious practices as well as buying up their predecessors, in essence, remaining the same company. What’s even more egregious, if I didn’t ask, they did not disclose details. Because they’re not regulated like the banks, they’re using this to their advantage and as an opportunity to foreclose valuable properties that can easily be saved.
What makes this patently egregious is how they prey on a segment of the population that cannot fight back: the uneducated, the elderly, and the unemployed. They tried to use people’s ignorance and vulnerabilities to their advantage. The banks are still doing this! Ever wonder how banks make billions off of overdraft charges alone? They do it by unfairly targeting the poor.
You don’t have to be a financial analyst to feel the impact of the economic downturn. I never imagined how closely tied our habits are to the products we pick up from the shelves of the neighborhood supermarket. Most of my life I never considered the price differences between name brand items and generic store brands. I always regarded the supermarket coupon handouts as nothing more than organized littering. Nonetheless, all of that has changed. Now, all of the aforementioned comes into play every time I shop.
Under the administration of Michael Bloomberg, we saw unprecedented arbitrary increases in the property value assessments- the higher the assessment the higher the tax. Even when property values decreased, the taxes kept going up. It seemed as if it depended on what the mayor needed in order to make up deficits and fill the city coffer at the expense of homeowners. I saw my property tax increase by a whopping 850%! That’s criminal! I’m still trying to figure out what my taxes get me. So far, just poorer and more stressed.
In spite of all of that, we survive. When you live in a country that has systems set in place that economically deprive citizens of color of equal pay and treatment, an economic downturn is nothing more than par for the course. None of my family or friends ever contemplated suicide; we just doubled down on our hustle. The downturn, in my case, was actually a gift, an opportunity. It showed me that what we clung to as ‘security’ was a figment of our imagination. That we had to take the bull by the horns, find what impassions you and take the plunge. What’s the worst that can happen?
When you’re kept at the bottom of the rung, it’s not like you have far to fall…the economy already did that for you!
Earl Davis is the Executive Director of Project Brownstone. He lives in New York City.