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84 Percent of San Francisco Foreclosures Fraudulent--Why are Bankers Still Getting Away with Crimes?

Someone broke the financial system, and evidence that the break was willful is now piled as high as banking execs’ bonuses.

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As a result, millions of people have lost their homes. Will those people ever be repaid? Not likely. Also as a result, already wealth-poor black and Latino neighborhoods and families have been stripped to the bone. Between 2005 and 2009, the racial wealth gap grew to its  largest point on record; the median wealth among white households is now 20 times higher than it is among African Americans. In that time period, median net worth fell by 53 percent among black households and by 66 percent among Latino households.

There is hope in the work of a handful of state attorneys general who have suggested they’re ready to at least direct one set of dirty words at Wall Street: “civil and criminal complaints.” The recent settlement is a narrow one, because California, New York, Delaware and others held out for the right to sue for fraud committed at the time loans were originated and at the time they were sold to investors.

The fact that those AGs had to fight so hard in the face of such enormous evidence of wrongdoing is proof of how well the banks’ “wasn’t me” strategy has worked. Still, if there remains a chance for accountability—if not restoration—in the Great Recession, it lies in the hands of people like New York AG Eric Schneiderman and California AG Kamala Harris, to whom the San Francisco County assessor delivered his audit Thursday. Four years after the foreclosure crisis began, we are all still staring down the bald lie that the nation’s largest banks aren’t responsible. The truth would set us free, if we’d let it out.

Kai Wright is editorial director of and an Alfred Knobler Fellow of The Nation Institute. His investigative reporting and news analysis appears regularly in The Nation, The Root and The American Prospect, among other publications, and he is a regular commentator on National Public Radio and in other broadcast media. His work explores the politics of sex, race and health. He has closely covered the foreclosure crisis and the ensuing economic collapse.