Homewreckers

by Aaron Glantz

How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream

In the spirit of Evicted, Bait and Switch, and The Big Short, a shocking, heart-wrenching investigation into America’s housing crisis and the modern-day robber barons who are making a fortune off the backs of the disenfranchised working and middle class—among them, Donald Trump and his inner circle.

Two years before the housing market collapsed in 2008, Donald Trump looked forward to a crash: “I sort of hope that happens because then people like me would go in and buy,” he said. But our future president wasn’t alone. While millions of Americans suffered financial loss, tycoons pounced to heartlessly seize thousands of homes—their profiteering made even easier because, as prize-winning investigative reporter Aaron Glantz reveals in Homewreckers, they often used taxpayer money—and the Obama administration’s promise to cover their losses.

In Homewreckers, Glantz recounts the transformation of straightforward lending into a morass of slivered and combined mortgage “products” that could be bought and sold, accompanied by a shift in priorities and a loosening of regulations and laws that made it good business to lend money to those who wouldn’t be able to repay. Among the men who laughed their way to the bank: Trump cabinet members Steve Mnuchin and Wilbur Ross, Trump pal and confidant Tom Barrack, and billionaire Republican cash cow Steve Schwarzman. Homewreckers also brilliantly weaves together the stories of those most ravaged by the housing crisis. The result is an eye-opening expose of the greed that decimated millions and enriched a gluttonous few.

Genres: Nonfiction, Politics, Economics, History, Business, Finance, Audiobook

440 pages, Kindle Edition

First published October 15, 2019

About the author

Aaron Glantz produces journalism with impact. A two-time Peabody Award-winner and finalist for the Pulitzer Prize, Glantz’s work has sparked more than a dozen Congressional hearings, the signing of new laws, and criminal probes by the DEA, FBI, Pentagon and Federal Trade Commission. Because of his reporting, 500,000 fewer U.S. military veterans face long waits for disability compensation, while 100,000 fewer veterans are prescribed highly addictive narcotics. His work has been featured in the New York Times, Chicago Tribune, NBC Nightly News, Good Morning America and the PBS NewsHour, where his work has been honored with an Alfred I. duPont-Columbia Award and nominated for two national Emmy Awards. A senior reporter at Reveal from The Center for Investigative Reporting and a recent JSK Fellow at Stanford University, Glantz’s books include "Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream," "How America Lost Iraq," "The War Comes Home: Washington’s Battle Against America’s Veterans," and "Winter Solider Iraq and Afghanistan: Eyewitness Accounts of the Occupations", which he
coauthored with Iraq Veterans Against the War.

Reviews

[Aaron Glantz]

I wrote the book so of course I like it!

Leaving this here if you'd like to leave a comment. I'll read it and respond!

[Kimberly Cascio · Rating 5 out of 5]

This is the book that will renew outrage about America’s wealth gap, the state of American homeownership, and the systemic corruption within the American financial system.
Are your eyes glazing over? Stop it, because this book doesn’t just spill the tea about the housing bust as much as dumps the tea into a nearby harbor. It’s an outrageous, well-sourced, riveting account of how a few real estate moguls profited from the economic crisis that devastated millions. Like some of the best crime documentaries, Homewreckers has a nonstop, take-your-breath-away narrative (unethical shell companies have gobbled up an absurd amount of foreclosed homes), so grab some coffee, and go read Homewreckers. It’s a must-read.

[Nancy · Rating 5 out of 5]

I won this in a Goodreads giveaway.
An in depth look at where deregulation has led us.

[Thomas Kelley · Rating 5 out of 5]

If you have seen the movie or read the book "The Big Short" you need to read this book also. If not you still need to read this book it is very informative. The main focus of this book is the housing bubble and collapse of the banks and the housing market around 2007 and 2008. This book should make you mad. I will not go in to a lot of detail because I feel it will give a lot of the details. But I will say I cannot believe how our government gives things away. This is not a one sided political that finds fault with one political party as it finds fault with many different presidents including the last two administrations. It does cover a lot of the individuals that are advising or surrounding our current President. And I thought he drained the swamp after reading this it makes you wonder. Every citizen should read this book.

I received an ARC from Netgalley

[Lacy Zusammen · Rating 4 out of 5]

I would like to think that if this book had been published before the election that we wouldn't have Trump as President or Steve Mnuchin running the Treasury because the people who voted for him would be outraged that they were the cause of many of the issues they thought this administration would solve and that they gleefully did as much to profit from it and ensure it worked out only in favor of the wealthy. But too many people don't bother educating themselves beyond the carefully controlled info Fox News doles out so even coming out before this election, this info will sadly only continue to outrage the people who already outraged with the system to begin with.

[Dixie · Rating 5 out of 5]

I am still reading this book. So far, what I have read has been a real eye-opener about all the greedy pals of #45 and how they took advantage of the poor souls losing their homes to foreclosures in 2008. I think it should be read by not only all Americans, but globally. This should become a book requirement in schools as well. Kudos to the author.

[SFHelmut · Rating 5 out of 5]

If you are not angry after finishing Homewreckers, you weren't paying attention.

Not that Glantz does not show us signs of hope, but they are subsumed by the missed opportunities that our leaders had to make things better for the nation.

Housing as a topic bores people. The vast majority of Americans would rather watch sports than think about housing policy. The irony is, of course, that by the time the game is over, the game is very much over.

Glantz draws back the curtain to show us all how this game is played. There are two sets of rules. One for the regular people, and one for the predators who eat them.

This was an excellent read.

[Steve Peifer · Rating 5 out of 5]

Horrifying portrait of a government that did much to CAUSE the financial crisis by taking their eyes off the ball and then since they couldn’t be bothered to run the banks they had to take over, gave sweetheart deals to people who didn’t get how important home ownership was to the economic foundation of the country. They didn’t care. They just made a quick buck. One of them is the Secretary of the Treasury.

I understand how too many government regulations can make it hard for a business, but this book reminds you why government is needed. There are a lot of crooks out there.

[Nancy Mills · Rating 3 out of 5]

This is an important book, all Americans should read! The power that Wall Street, Big Banks and their political puppets wield is disastrous for the rest of us.
I really, really wanted to give this book 4 stars; it's compelling, well written and admirably researched by author Aaron Glantz. I tend to like books written by real journalists; they are concise and not cluttered up by a bunch of mumbo jumbo that makes my eyes glaze over.
My only grievance is a few extraneous-seeming passages which, aside from being unnecessary, made me suspect a reporting bias. Not always a bad thing, but when the reader senses an angle, it makes them question what else may be left out or a bit lopsidedly summarized.
For example, when discussing a vulture-capitalist bank (and I like that term!): "Corporate landlords had the resources to use advanced metrics to screen out all but the most high-quality tenants.. rating agencies noted that Barrack's company aggressively screened potential tenants, accepting only those with verified employment and a history of paying rent on time."
Well, duh. I'm about as Mom-and-Pop as a landlord can get, and I use every resource I can muster to screen my tenants. Verified employment (or at least a qualified source of income) and a good payment history is a no-brainer. This has nothing to do with being a big bad corporation, it's just rational behavior for an entrepreneur who is in a business where your customers can cause thousands of dollars worth of damage in the blink of an eye, it can months to remove them, and if they don't pay, you can't pay your own mortgage and bills and lose the assets that ARE your business.
There is also a passage that states that 68 Trump University instructors had "checkered pasts, including convictions for cocaine trafficking and child molestation." Not saying these a good things, but after a whole litany of very valid statistics on the lack of qualifications of these instructors, a cocaine conviction is irrelevant to ones qualifications to teach us about real estate.
While many of these political weasels and vulture homewreakers are roundly and satisfyingly scourged, the author pointedly lays off Trump's opponent Hillary Clinton. You'd never know of her warm, loving relationship with the Big Banks that got fat off the repeal of the Glass Steagal Act (thanks, Bill Clinton). Citigroup, Goldman Sachs, Morgan Stanley and JP Morgan Chase were among Hillary's top ten donors during her run for president. If you're going to vilify one side, you should at least make a note that the other side is doing the same corrupt stuff, even if that's the side you like. Same with Obama. His TARP plan (original TARP plan was from Bush II administration and we all know he's a moron) helped out the Big Banks and Big Automakers/Unions, but very little helped the People who were most hurt by the economic crisis.
If you keep in mind that the whole story isn't necessarily told in this otherwise very good book, it's a very worthwhile read. We should all read this stuff before elections, and we should talk about it at dinner parties, and we should remember who is scratching whom's back, and why the piddly little $200,000-400,000 annual salary We The People pay them is just a drop in the bucket compared to what the they get from the Wall Street crowd.
Reading about the opulent lifestyles of vultures like Steves Mnuchin and Schwartzmann, Tom Barrack, etc. is pretty nauseating when you realize that they have gotten obscenely rich via so many "ordinary" people's misery. But it's stuff we should know, because if we aren't aware of it, we have no hope of changing it.

[Shivakumar Srinivasan · Rating 4 out of 5]

A story on a few players who were not covered in depth in the tons of books written about the housing bubble and GFC. Well researched and covers ground on the mortgage industry not covered in other books on this topic

[Patrick Shuman · Rating 4 out of 5]

I loved that I hated this book. So many crooked people screwing over the middle class. What's not to love to hate?

[Heidi · Rating 4 out of 5]

Ever wanted to know how millionaires and billionaires multiply their wealth with government subsidies and screw small property owners and renters? This books explains it. It gives the story of a single family home in Los Angeles and the reverse mortgage that took the house with criminally bad financial practices. Glantz shows how that combines with government bank sales that are impossibly cheap but only available in quantities that a billionaire can buy. And while he describes the 2008 housing crisis in the most detail he also shows how this cycle is a repeat of the Savings & Loan crisis with each new generation of 'vulture capitalists' buying failed banks from the government and making billions while residents suffer. Glantz looks at apartment buildings in Atlanta and subdivisions in Florida as well as single family homes in Los Angeles and San Francisco in this wide ranging look at property ownership in America. He describes a widespread lack of maintenance, increasingly harsh leases, and former homeowners paying rent to the successor companies that took her home. Decades of housing subsidies and the growth of the Trump real estate business is covered in a chapter or two that describe abusive, and often racist, practices and a series of slap on the wrist fines that don't discourage bad behavior.

A muckraking piece of journalism in the best traditions but Glantz doesn't go into the the more theoretical and moral critiques available here - I find myself describing the book and the situation in much harsher language than he uses. While he demonstrates the consequences for both the wealthy land & bank owners(aka as the owners of 'capital' aka the capitalists) and the renters, and the lack of opportunity to gain property, this is foremost a book of journalism, not politics. When I read stories of someone living in a home and making payments where they can and they get foreclosed upon and their home is sold to a company paying less than the previous owner and the government helped out the companies in that transaction rather than the resident? That make me mad. That brings up many systematic critiques that I think will occur to the reader naturally. This is impressive journalism in that it clearly indicates problems and leaves the solutions to the reader. I expect this book will serve as a source for many a few exposés on the wealthy and inspire research on the slums whose ownership is hidden behind obscure LLCs. Infuriating and important, this is absolutely worth a read.

[Sean · Rating 5 out of 5]

I'm a homeowner living in a neighborhood surrounded by Homewreckers. I can confirm that Glantz's work is a very true, eye-opening, and infuriating take on how greed and havoc benefits men who "'have incomes they cannot possibly spend, and investments that roll like avalanches ...'" (p. 155). (Glantz, here, quoting James Truslow Adams from ... 1931! How little has changed ...).

'Homewreckers' - well worth a read and a great start for understanding how we've found ourselves, in part, in this outsized, national housing mess.

[Mike · Rating 5 out of 5]

How terribly depressing! This is another look at how money begets more money often at the expense and on the back of the common man without the ability to sway political power in his favor.

Takeaways:
1. A solid base of the large corporate entities who now own tens of thousands of rental homes in the US were created fundamentally by using US provided loans, guarantees, or below market prices for forclosed homes.

2. They used financial instruments which transferred all risk of loss to american tax payers, while using borrowed funds to finance taking of their houses.

3. They systematically increased rents to keep the poor, poor, while pushing costs of maintenance of rental properties onto the poor renters themselves.

4. It was common and is becoming more common to use complex financial agreements and hard sell sales practices to prey on the elderly, and poor who likely don't have the financial literacy to understand predatory contracts to kick families out of their homes and transfer them to the corporations, instead of passing them down to their children as inherited wealth.

5. Many of the same behaviors of securitization which were behind the crash of 2008 are coming back in vogue and being used for rental properties.

6. Government policies of the past 30-40 years have directly led to a significant decrease in wealth passed between generations, and instead moved that wealth toward the top 1% of the country further increasing the wealth gap.

Darn depressing!

[Debra Daniels-Zeller · Rating 5 out of 5]

This book is about the Great Recession, the housing market, NINJA loans, reverse loans and how so many Americans were bilked out of their homes and who bought them. Well-researched, this book was fascinating, in a horrible way, I realized what a bind so many Americans are in today because of reverse mortgages, foreclosures that shouldn't have happened and the rigged shaky financial system that is so lucrative that wealthy hedge fund managers can't help but help themselves as there are so many loopholes as far as they are concerned. I was shocked by how much President Obama failed to help average homeowners, the foreclosure machine, how Steve Mnuchin acquired IndyMac and made an incredible amount of money on bad mortgage backed securities that are not getting paid off, just shuffled around, while wealthy men make off with millions. An eye-opening read for sure!

[Grant · Rating 5 out of 5]

Aaron Glantz has done an amazing job here. Just when you think you've heard all about the GFC and subsequent bail outs, Glantz hits you with the stories professional government grifters who enrich themselves off the backs of the tax paying people of America. READ THIS BOOK! (And try not to punch a hole in the wall as take in the amount of corporate welfare that has ended up in the pockets of the tax dodging elite few.)

[Lynn · Rating 4 out of 5]

This a meandering and complex book about how government laws prompted people to speculate in real estate causing a housing crisis several times in recent American history. Especially the crisis in 2006. Now these men are in the government. They are changing the laws in their favor. The author thinks things can change. Not an easy read and pretty co fusing to me but these people are really bad.

[Rodney Shae Andrews · Rating 5 out of 5]

The most frustrating book I may have ever read. Not because of the author but how disappointing the content is. MUST READ!

[Alison · Rating 4 out of 5]

If you want to be angry at the way things are and yet hope for systemic change with some practical tips on how to hopefully get there, this is the book for you.

[Adamson Bryant · Rating 3 out of 5]

I was hoping for more insights into the consequences of the homewreckers buying up so much housing stock but it ended up being more of an expose on how much these guys profited

[Karl Erdmann · Rating 5 out of 5]

A must read/listen with purpose-driven, insightful, and provocative accounts of one of the largest handouts to massive, oligopolistic, finance corporations.

It's mind blowing the scale of communistic-like giveaways recent government entities and administrations provided to value extractors, otherwise known as renting seeking behavior, that economists unanimously warn of, instead of the middle class.

The amount of effort it took to write this detailed account is apparent and hard not to appreciate.

A few references that are taking actionable steps in an attempt to protect consumers and rebalance the inequality. (Please feel free to add to the list)

National Community Stabilization Trust, http://www.stabilizationtrust.org/
Consumer Advocates Against Reverse Mortgage Abuse, http://elderfinancialterrorism.com/

[Peter Z. · Rating 1 out of 5]

Classic. Obama creates a problem by putting government guarantees on garbage loans causing banks to loan to people at no risk to themselves, then when the Plan inevitably fails, blame "greedy" businessmen for cleaning up the mess and bringing equity to save what was left. Got news, if it wasn't for private business, the taxpayers would have been jammed up even worse. It's capitalism people. Trying to make a profit is how we survive. It's when government puts perverse incentives on a free market that the shit hits the fan. Cash for clunkers anyone?

[Carolyn · Rating 5 out of 5]

A thoroughly harrowing account of how 'the homewreckers', as Glantz dubs them, stole the residential housing market in the wake of the 2008 crash. Deeply researched, Glantz uncovers the steal behind the buyout that flipped the American Dream of personal home ownership and a nation of wealthy barbers into a renters market. Carefully tracing how presidents and financiers unpicked the stitches of the New Deal, Glantz shows how the rich got super richer. This book is as compelling as any mystery or thriller.

[Debbie Smyth · Rating 4 out of 5]

This book gives you a clear, concise overview of the aftermath of the foreclosure crisis. Living in SF Nay area, it answered a lot of questions for me like 1) why there is a dearth of starter homes on the market, 2) why the number of evictions have grown and 3) why we have people sleeping outside under freeway underpasses. And that some of the largest architects of this situation work in the current administration. Well written and easy to comprehend. I highly recommend and PLEASE vote.

[Circe · Rating 4 out of 5]

This was super interesting! I really had no idea that so many venture capitalists were buying up single family homes and renting them out. My one minor complaint though is that I wish the author had told more stories about families affected by this and gone less into the backgrounds of venture capitalists and other rich owners of sketchy LLCs. I’m much more interested in the life stories of normal Americans than the mega-rich.

[Mary | maryreadstoomuch · Rating 5 out of 5]

One of the most readable non-fiction books I've tackled this year. This book will make you very, very angry about the way the housing bubble was handled and the men who will stop at nothing to make a profit.

[Kathleen Hulser · Rating 4 out of 5]

Glantz tells a horrifying tale which clarifies the financial machinations of the super wealthy who bought up foreclosures in the last Great Recession, turning millions of single family homes into rentals and shrinking the pool of starter houses for at least a generation. The rate of home ownership has dropped in the US dramatically, and a broad swath of the population is unable to accumulate any security or assets in the form of their home, customarily the largest single source of family wealth. Once again the evil financial instrument, the securitized mortgage plays a role, in a slightly different form than the product at the heart of the 2008 economic collapse. The villains here are familiar: unsurprisingly, a list of Trump donors and officials always contains many of the most malevolent. Steven Mnuchin, the foreclosure king, and Trump's Treasury Secretary is one of the big players, and in truly Trumpian fashion augmented his fortune by rendering hundreds of thousands either homeless or forever rent-burdened. Wilbur Ross, former disgraced Sec. of Commerce was also a big investor, as were J.C. Flowers and Steve Schwartzman (Blackstone). Companies such as The reverse mortgage is just one of the ways these devils invented stealth home stealing: preying on the elderly who dazzled the quick cash payout of a reverse mortgage, did not understand how fees, interest, costs and manipulation of real estate appraisals meant that usually heirs would lose the house. Like many financial expose books, this is painful to read because the abuse is so clear and the financial hitmen so successfully lobby and deform bailout laws to line their already bursting coffers. Anyone with a shred of justice in their soul will be outraged, saddened and possibly galvanized to action by this tale, since in the wake of the pandemic, foreclosures are sure to proliferate, with the jackals of the one percent salivating at the trough of Federal "help" and distress auctions. And it will make you blood boil, to realize how seldom the famed "loan modification" which was supposed to help families pay for their devalued homes was rarely used.

The power of narrative economics has cloaked much of this action in appealing verbiage, "saving the economic system," "stabilizing the banks," " reassuring investors." It is daunting to try to understand the ecology of the subprime loan, but the main theme is that despite the shaky status of the loan, the lenders made money, and the borrowers (often BIPOC who were given discriminatory high interest rates and fees, despite average credit scores) were crushed and dispossessed. Some of the big criminals were Mortgage Lenders Network and Colony Capital (run by Trump crony Tom Barrack), One West Bank and many other firms that have since failed (however usually only after being stripped of assets for big payouts to the takeover firms run by these Robber Barons). Alas the Federal agencies are all too often the lap dogs of the big investors, writing or bending rules that protected the investors from any losses, but virtually never holding them responsible for abuses. Indeed, the FHA seems to operate as an enforcement agency for deceptive lenders. So subprime loans, reverse mortgages, securitized real estate debt, and robo-signed foreclosures underpinned a glorious period of earnings for these top level criminals, while millions of Americans lost their homes. And in the wake of the foreclosures, the banks and investor trusts bought up cheap properties and offered them as rentals, jacking up the rent, and writing abusive rental contracts that made the renter pay for repairs that landlords ordinarily would perform on their own properties -- plumbing, roof leaks, sewage breaks, pest infestations... all paid for by renters. Sometimes the renters were the former owners, kept in place but with all their equity in the bank accounts of Mnuchin, Barrack, et al. A new layer of national mortgage and rental servicing companies was added, to streamline foreclosures and evictions, while cutting costs and making it impossible for renters to even find and contact the actual owners. Needless to say the "dis-servicing" companies always have an army of lawyers to harass both renters and borrowers, sometimes pouncing when even one mortgage payment is late. The corporate shell company has become a major form of home ownership, escaping scrutiny, accountability and the rule of law, as was always the intention in creating corporations. The investigation is sickening, but Glantz who tirelessly researched this well-told story does offer some remedies at the end, contrasting the New Deal success of building home ownership (except for its discriminatory redlining of African-Americans and city dwellers) with the widely documented exploitation of today's distressed with the help of Federal backing of the financial system. Label the Laffer Curve napkin, a fairy tale --the myth that promises "lowering taxes will stimulate economic activity which will trickle down to all." You will never again hear the phrase "too big to fail" without calling your representatives to make sure the plundering of America in the name of stability is halted.

[Erich J · Rating 5 out of 5]

Extremely well written, depressing that the people of this country have so little recourse with our own government.

[Chris]

I'm quitting about halfway through (right after the redlining chapter) because it's an upsetting book and I need to freakin' relax right now. Here's what I'm taking away from it.

The Obama administration had the chance to hugely improve the situation for normal homeowners and tenants. Basically, Freddie Mae and Fannie Mac held a ton of mortgages at the beginning of the recession. Banks didn't own the debt any more, they were packaging them up into mortgage-backed securities and selling them. F&F owned a lot of them - about one third of all the country's mortgages. Now that the mortgages were (seemingly) worthless, F&F wanted to get rid of them. The author does a good job of showing how the government impulse to get rid of (on-paper) bad assets works into the hands of vulture capitalists. The rich people that survived the recession can offer turnkey deals that clear off government books quickly, but at huge actual and opportunity costs.

Both the ACLU and the National Realtor's Association supported ideas that, basically, would've sold the mortgages, little by little, to local owners or nonprofits. Local tenant rights groups or local landlords would've been the beneficiaries.

They didn't go with that. They sold the mortgages as quickly as possible to anonymous LLCs backed by people like Steve Mnuchin, Steve Schwartzman, and Sean Hannity. Those LLCs are now some of the largest landlords in the country - they own thousands of houses anonymously. They have automatic rate hikes, they're not responsive when something breaks, and they're probably based in an office tower thousands of miles away. In Atlanta, the largest 15 landlords are these national LLCs - all companies that didn't exist before the recession. Obama created that.

The book isn't entirley about Obama. It mostly focuses on some of the "homewreckers" that made a bunch of money during the recession. The Obama parts are the most infuriating, though. I expect creeps like Mnuchin to do the vulture capitalist thing. I expect, hope, wish that Democrats like Obama were effective in stopping them.

[Jonathan Jasinski · Rating 4 out of 5]

Really good book, makes complicated financial concerns more understandable, and the overall narrative and facts weave together very well.

It’s just not breaking too much new ground, and I wish it’d done more to highlight Obama’s failures. Everyone not neck-deep in the koolaid knows Trump and co. are robber barrons, but Obama bailing out the banks really set the stage for this mass disillusionment and distrust of the Democrats (and for good reason). Was that ignorance, or corruption? You see in this book time and again how banks just ran circles around the government, but I personally feel Obama’s administration seemed more competent than examples from the ‘80s or ‘90s. That was such a huge turning point, where Democrats could have seemingly helped the people and put some power back in our hands- instead they simply gave in to corporate interests, the true driving force of our entire history. Shame, because it’s clearly led us to a breaking point.

So anyways, ya- more details/exploration on why the bank bailouts took the initial structure they did would be nice. This just kinda covers how they broke the game, then reaped benefits for it afterwards. Trump’s group is held accountable, I just don’t recall a good explanation as to why Obama’s presidency rewarded billionaire foolishness. I’m not equating the two, Republicans are a corpo-fascist mess, I just think more could be done to explain why people have gone that way- Dems have absolutely bungled the opportunity to be an alternative, and a voice of reason, through their own corporate corrupt ways.