Real Estate of Siege
Documentary about the financial crisis hits close to Baltimore homes
American Casino tells the story of the mortgage meltdown and financial crisis through the eyes of the victims, including several in Baltimore. It is a sweeping indictment of the current predatory system and, in many ways, a video brief for Baltimore's class-action "reverse redlining" lawsuit against Wells Fargo.
The theme--that the U.S. financial system is not the crucial aid to production and general wealth run by serious and sober professionals, but is instead a giant casino peopled by hubristic cash junkies--is by now well understood by most citizens. Director Leslie Cockburn breaks down his theory in small chunks, following the "value chain" (in the ironic words of one unnamed banker), from Manhattan's glass towers to California's dusty Inland Empire.
Cockburn begins at the top, reprising former U.S. Sen. Phil Gramm's "nation of whiners" quote and former Federal Reserve Chairman Alan Greenspan's admission that he "found a flaw" in his ideology. But the explanation and context for these quotes is crucial, and for that there's Michael Greenberger, former director of the Division of Trading and Markets at the Commodity Futures Trading Commission (currently a law professor at the University of Maryland). He explains how Gramm exempted derivatives from any regulation, either as financial instruments, insurance, or gambling.
Along the way, Casino introduces some of the people who got rich, some of whom had enough conscience in them that they quit. One former executive for Standard and Poor's, the bond rating agency that inexplicably awarded investment-grade AAA ratings to toxic mortgages, explains the veritable bribery scheme that existed. S&P got about $100,000 per rating, he says. His admission is followed by an anonymous former Bear Stearns employee who says, "they didn't run their own models."
That is, S&P got $100,000 and did no work at all, leaving it to the bankers to analyze the bond's likely worth.
For many viewers, Casino's most compelling characters will be the Baltimoreans who have lost their homes. Denzel Mitchell is a teacher who bought a house for $135,000 and somehow lost it, and Johns Hopkins therapist Patricia McNair claims she got a $2,000 monthly bill on an $85,000 mortgage. The movie should have gone into more detail in these examples.
What's not explained is that McNair's original note--for $89,000 or so--went into default and then she refinanced with a company called Mystic Investments, for $122,000 at 12 percent interest. Her new payments were more than $1,200, not including taxes.
That lender, run by Elliott Dackman from an office on Maryland Avenue, is not heard from. One of his other corporate entities took over the house a couple of months ago. The house is still assessed at nearly $200,000 so, in effect, Dackman got a $200,000 house for $122,000.
Almalene Wade, another Baltimore borrower featured in Casino, lost a home she had inherited from her mother over a $28,000 Wells Fargo loan. That loan featured an adjustable rate and a prepayment penalty, and Wade--a church deacon--says the foreclosure left her homeless.
This scenario checks out. But the movie might have explored another home Wade owned with her mother and lost to foreclosure more than 10 years ago. According to land records, Wade and her mother received 2816 Grantley Ave. for free from their church, and immediately borrowed $25,000 against it, defaulting within months. Since then, the house has had several owners, including the drug dealer Raeshio Rice.
The Grantley Avenue house could offer a deeper look at the interplay between poverty, non-profit institutions, and the city's drug-fueled shadow economy. But that scenario is beyond the movie's scope.
American Casino tells a true and terrible story about greed at the top and pain at the bottom, but it may oversimplify the complicated lives of its local protagonists, and thereby misses some of the nuanced relationships connecting the city's very poor to the billionaires of Wall Street and Washington. It's a route that often goes through local "entrepreneurs," both legal and not. If Cockburn had introduced a few of those, the picture would be more complete.
Instead, Casino offers McNair trying to pay her mortgage late. "They won't accept the check," she says, crying. "If they won't accept the check, then no one can ever get current." She appears, even then, not to understand that taking her house may have been the lender's plan all along.