By Ron Howell
Guest Contributor
There is a side of me that remembers the days when the number of Black CEO’s sat squarely on zero. That side of me moans, softly, over the departure of Stanley O’Neal as Merrill Lynch’s top executive and board chair.
But the unapologizing truth is that I mostly feel anger toward Merrill Lynch, for its role in the sub-prime crisis that has claimed O'Neal's job and, more tragically, the homes and happiness of tens of thousands of foreclosure victims.
My beloved community of Brooklyn – known to many as the center of the African diaspora, because of its hundreds of thousands of residents who are natives of the Caribbean, the United States and the Mother Continent itself – has been a special victim of this crisis created by greed.
Hundreds of Black families there, and countless thousands elsewhere, are bracing for the foreclosure hatchet to come down on the necks of their financial lives.
A bit of history. Going back a few years, money-hungry investors plying Wall Street and Main Street sought other corners on which to place their bets; and they turned to little cubbies inhabited by struggling souls who were, largely, people of color, cash-short workers looking to purchase a home or simply make repairs to one. These loans were “bundled” into packages and passed up the ladder, in schemes in which Merrill Lynch and others were key players.
The evidence of roguishness in this crisis has been mounting.
Recently, the New York State Attorney General, Andrew Cuomo, said in a law suit that Washington Mutual schemed to get selected real estate appraisers to put higher price tags on properties to be purchased by “sub-prime” borrowers. And more recently, the New York Times reported that banks and lawyers across the nation have been bilking these borrowers as they crash toward foreclosure.
I, for one, don’t even like to refer to all this as the sub-prime loan crisis. I prefer to call it the predatory loan crisis, because these financial institutions effectively acted as predators, using brokers to find decent but often gullible people willing to take out loans at exorbitant rates and on shylock-like terms that were, too often, way beyond their means to repay.
The result of the predatory loan scandal has been the meltdown that we have seen lately across the country, a broad-based case of things-falling-apart. It is causing deep personal pain in communities like the Bedford-Stuyvesant section of Brooklyn – New York City’s most populous and most Black borough.
In New York City, it is anticipated that about 14,000 homes will have foreclosure actions filed against them by the end of this year, and the boroughs of Brooklyn and Queens will account for more than 72 percent of those filings.
The neighborhoods most affected will be the Black areas of those two boroughs, Bedford-Stuyvesant and Flatbush in Brooklyn, and Jamaica and Rochdale in Queens. (These projections were made by the Neighborhood Economic Development Advocacy Project, or NEDAP, which seeks to “promote community economic justice, and to eliminate discriminatory economic practices that harm communities and perpetuate inequality and poverty.”)
What’s also unsettling here is that there are some who continue to gain from the pain of these victims of predatory lending. In New York City – as overall real estate prices continue to rise – lovely brownstones of Bedford-Stuyvesant are becoming bargains for whites and other upper-middle income workers looking to own a home.
The reason? The newcomers are benefiting from the fact that foreclosures in Bed-Stuy have effectively driven down prices. The headline on the Times article about this was “ Brooklyn: A Bargain Hunter’s Guide” (October 14, 2007).
So I say to Black people in New York and elsewhere, and to housing advocates: Be vigilant and take arms (metaphorical arms!) against this sea of schemers dressed in suits and ties.
As for Stanley O’Neal, his executive sunset will likely be laced with gold. Not to make accusations, but perhaps some act of contrition on his part would be in order, like a contribution to some fund assisting victims of predatory loans.
Just a thought.
Ron Howell is a veteran journalist and neophyte blogger. Over the years, Ron has been a reporter -- domestic and overseas -- for Newsday, The Associated Press, Ebony Magazine, The New York Daily News and The Baltimore Evening Sun.
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