Newt Attacks Romney for Profiting Off Florida Foreclosures
This morning, Newt launched a new broadside against Mitt Romney, attacking him for personally profiting, via a Goldman Sachs investment, off mortgage lenders responsible for thousands of foreclosures in Florida.
The charges Newt is leveling against Romney stem from an exclusive item ThinkProgress broke yesterday. ThinkProgress’ Josh Israel explains:
A ThinkProgress examination of Mitt Romney’s presidential personal financial disclosures from May 2011 reveal that the former Massachusetts governor and his wife own or owned millions of dollars worth of a Goldman Sachs investment fund invested heavily in mortgage-backed obligations. And the current owners of those mortgage debts began foreclosure proceedings against thousands of Floridians.
Along with his investments in Bain Capital funds linked to offshore tax havens, the Romneys have large investments in the Goldman Sachs Strategic Income Fund (institutional class). The firm’s March 2011 annual report for the fund notes that about 8 percent of the fund is invested in banks and 24.5 percent is invested in mortgage-backed obligations. Romney’s form says he has invested between $1,000,001 and $5,000,000 in the fund and his wife Ann has invested an additional $1 million-plus. Since the 2008 economic meltdown and the enactment of the Troubled Asset Relief Fund, this fund has done quite well, growing 7.88 percent between April 2010 and March 2011.
The mortgage-backed securities in the fund include adjustable rate mortgages from Bear Stearns, Countrywide, IndyMac, and Washington Mutual. A 2009 Center for Public Integrity report identified all four of those companies as among the top-25 subprime lenders in the lead-up to the market’s collapse. Countrywide ranked first in that report and Washington Mutual ranked second. While the remnants of those companies have been purchased by major financial institutions, an array of mortgage loan service companies bought up the individual mortgages.
An examination of civil cases filed in Miami-Dade county alone, by just the current owners of the mortgage obligations for now-defunct Washington Mutual and Countrywide, suggests more than 5,000 foreclosure cases were filed in 2010.
And Miami-Dade makes up only about 13 percent of the Florida population, suggesting that these and the other owners mortgage-backed securities included in this fund likely have attempted to foreclose on tens of thousands of Floridians.
A review of Romney’s August 2007 financial disclosure for his 2008 campaign reveals no mention of the Goldman Sachs Strategic Income Fund, suggesting the investment was made at some point between the two campaigns.
The funds are identified on the disclosure form as technically being in a “blind trust,” but now that he has publicly disclosed these assets, the trust is no longer functionally “blind.” The trustee for the trust, R. Bradlford Malt, said this week that he dropped some other Romney investments that conflicted with the Republican Party’s values.
In October, Romney suggested that the solution to the foreclosure crisis was “don’t try and stop the foreclosure process. Let it run its course and hit the bottom.” While that process is bad for Florida homeowners, these investments show it may have been good for the Romneys.
The Romney campaign responded with a single word: “Wow,” and then leveled their now familiar (and tired) charge that this is an attack on the “free enterprise system.” Tellingly, the Romney campaign did not deny the substance of the allegations — that Romney personally profited, via a Goldman Sachs investment, in mortgage lenders responsible for thousands of foreclosures in Florida.
As we’ve said before: we’re not attacking the free enterprise system. We’re not attacking capitalism. We are attacking a broken economy where the game is rigged in favor of a privileged few at the expense of everyone else.
Instead of an economy where someone can amass a quarter-billion dollar fortune — on which they pay a lower tax rate than middle class workers — by laying off workers, bankrupting companies, and foreclosing on homes, we need an economy that works for everyone.
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