Campaign

On November 28, 2007, community groups from New York to Chicago to Buffalo announced a campaign to demand that the top five investment banks - Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns - give up bonus money to a national foreclosure prevention fund that will provide immediate relief to homeowners in danger of foreclosure. It was an intiative of NTIC's Save the American Dream anti-foreclosure campaign.

The campaign shone a spotlight on the crucial role that Wall Street played in causing the subprime foreclosure crisis. Seeing the devastating effects the subprime foreclosure crisis was having on their communities, these organizations had asked who was behind these loans - Who financed them? Who thought it was a good idea to give out mortgages with interest rates that climbed to 17%? Who stood to gain from the predatory lending that saddled people with these loans?

The campaign issued a report, Wall Street and the Making of the Subprime Disaster, that answered these questions. It found that the same investment bankers preparing to reward themselves with billions in bonuses had also engineered many people right out of their homes.

No bank agreed to give up funds for foreclosure prevention, or take any significant step to curb a crisis that was manufactured at their banking and trading desks.

Incredibly, in a year when homeowners are being foreclosed on in greater numbers than at any point since the Depression, investors are losing their shirts, and the economy is on the verge of recession (according to economists such as Lawrence Summers), investment bankers paid themselves more in bonus money than ever before - $29.8 billion from Goldman Sachs, Morgan Stanley, Lehman Brothers, and Bear Stearns combined, or $245,000 per employee on top of salary and benefits (Merrill Lynch will not report bonus figures until after New Year's).

This is about reparations, not charity. Financial wizardry on Wall Street caused this crisis, and investment banks need to take significant steps to begin repairing the damage they have caused American families and communities. The major banks also have the funds on hand to pay for services - not only loan modifications, but also counseling, educational programs, and legal services - that could prevent many of the millions of foreclosures that are set to occur over the next two years. In the hands of these bankers, this money will pay for Rolex watches, Porsches, and third homes, even as millions of people are being put out on the street. We don't think that's right.

Organizations

The campaign and report were made possible by the generous support of North Star Fund, a community foundation that advances the collective good by being the first to fund fights for equality, economic justice and peace in New York City.

National Training and Information Center (NTIC) is a 35 year-old network of community organizations that is dedicated to community organizing as a means of creating a more just and equitable society. NTIC is made up of 22 affiliate organizations in 10 states and works with 50 additional allied organizations from across the country. NTIC is most famous for leading the 1976 passage of the Community Reinvestment Act, a piece of landmark policy that has resulted in over $3 trillion worth of home loans being made in low-income neighborhoods.

Northwest Bronx Community and Clergy Coalition (NWBCCC) is a thirty-three year old broad-based, membership driven, social justice community organization. The members of the Coalition seek social, economic, environmental, and racial justice for our families, our communities, and ourselves. We do this through community organizing that utilizes non-violent confrontation, negotiation, and principled compromise.

People United for Sustainable Housing - Buffalo (PUSH-Buffalo) is a grassroots, non-profit community organization working to rebuild the West Side of Buffalo. PUSH organizes residents to confront institutions that perpetuate poverty on the West Side and to create and implement an action plan for improving the neighborhood.