Plaintiffs in Obama class-action housing lawsuit got … coupons

posted at 11:01 am on September 3, 2012 by Ed Morrissey

The Daily Caller has a multi-installment scoop about the business practices of a little-known presidential candidate as its Labor Day story.  This hard-nosed professional raised hopes of working-class people, made a million dollars off of them, and left almost all of them holding nothing more than worthless paper at the end of the relationship.  Are we seeing another episode of How the Heartless Vampire Capitalist Turns, starring Mitt Romney?  No, this one’s titled Fun With Community Organizers, starring Barack Obama.

The subject of the scoop is a class-action lawsuit filed in 1995 by Barack Obama on behalf of three lead plaintiffs and 180 subsidiary plaintiffs against Citibank for alleged discrimination in lending practices.  It lead to a settlement in 1998 in which Citibank agreed to increase sub-prime lending to African-American borrowers.  How did that work out for Obama’s clients?  Not particularly well:

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney.

Since the mortgage bubble burst, some of his former clients are calling for a policy reversal.

“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”

Still, the Citibank settlement was in the high six-figure range.  That should have helped Obama’s clients get started on new mortgages, right?  Well … it did help the lawyers:

Plaintiffs’ attorneys took home nearly $1 million in Barack Obama’s 1995 class-action discrimination lawsuit against Citibank, but 183 of the 186 plaintiffs did not get a dime.

Three named plaintiffs in the lawsuit — Selma Buycks-Roberson, Calvin Roberson and Renee Brooks –- each collected $20,000. But none of the [183] ordinary, or non-named, plaintiffs that The Daily Caller was able to reach for comment reported receiving any money. This is despite a claim to TheDC by the lawsuit’s initiator, attorney Fay Clayton, that the settlement paid the 186 non-named clients between $770 and $3,250 each. …

“We should have gotten some type of monetary reward from the lawsuit, which we didn’t,” said John Buchanan, one of the clients. “I don’t remember any money being offered since we were discriminated against,” Buchanan said. The bank “should have had to pay.”

Elwood Flowers said, “the attorneys got the fatter part.” All he remembered getting was “a 1.4 inch thick package of legal gibberish.”

Most clients said they didn’t see anything from the lawsuit.

Fellow plaintiff Juanita Malone told TheDC she did not get a payment or a loan from Citibank after the settlement.

Another, Patricia Dixon, said she “didn’t get anything” from the settlement.

Cary Cotten, wife of plaintiff Edward Cotton, said the couple “got nothing” from the lawsuit.

Of the nearly million-dollar settlement, three clients got a grand total of $60,000, while the rest of the clients got coupons.  What happened to the rest of the money?  Looks like the attorneys, starting with Obama, got the redistributed wealth, while the clients got the shaft.  It’s a great example of how broken the class-action tort system is, and how it can force businesses to adopt bad economic policy while benefiting no one except the lawyers.  It’s also a great example of the media’s utter failure in the 2008 election to take a serious look at Obama’s track record.  Why didn’t this come out?  Even John Edwards’ law practice got some scrutiny in 2004 and 2007, before Edwards’ candidacy imploded in scandal.

I daresay that Mitt Romney the Heartless Vampire Capitalist treated his clients a lot better than this, and that they actually profited by their association with him.  There is a lesson in this comparison for voters.


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Comment pages: 1 2

the real story is about cloward, piven, clinton and barry. barry is the mechanic.

the story is how housing went into a bubble and crashed, and how the people ‘helped’ by clinton/barry, in fact were not capable of funding an investment like a home

the story is about the top-down shakedown of banks to give up their money.

and, finally the story is about the current efforts to resume the shakedown, and give unqualified buyers houses…that they will default on…and therefore costing the banks and society a huge amount of money

for example…if you have money in the bank it earns 0. There’s a reason for that. the banks have to recoup their looses

you see we all have to pay…it is called re-distribution

r keller on September 3, 2012 at 3:19 PM

Dog-Whistles Decoded: Romney’s Shockingly Racist Acceptance Speech (snark)

http://predicthistunpredictpast.blogspot.com/2012/09/dog-whistles-decoded-romneys-shockingly.html

M2RB: Pink Floyd

If Golf Is Racist, What Do “Country Club Republicans” Do At Country Clubs?

http://predicthistunpredictpast.blogspot.com/2012/09/if-golf-is-racist-what-do-country-club.html

M2RB: Neuroticfish

Resist We Much on September 3, 2012 at 3:56 PM

From the article:

“[I have] been paying the mortgage with no problems since 1969, until about [the] last two months, when I had taken ill and wasn’t able to work and take care of the business,” Samuel Wilson told TheDC.

“The” mortgage? That’s 43 years of paying on it. There is either a long, sordid history of refinances and equity loans, or this was the crappiest mortgage deal ever.

ss396 on September 3, 2012 at 4:16 PM

Typical ass-claction lawsuit! Such suits fit attorneys ever so well; they make the big money, while the clients get coupons good for a few bucks off their next Netflix™ order.

Rule of law can be perverted into rule of lawyers.

Olo_Burrows on September 3, 2012 at 5:13 PM

“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”

Well Duh? That use to be the case without a regulation, you moron!

Achele175 on September 3, 2012 at 11:16 AM

I assume that was a face palm? Yep

whbates on September 3, 2012 at 5:30 PM

a class-action lawsuit filed in 1995 by Barack Obama on behalf of three lead plaintiffs and 180 subsidiary plaintiffs against Citibank for alleged discrimination in lending practices.

Obama caused the housing debacle that he blames Bush for. This needs to be shouted from coast to coast!

tinkerthinker on September 4, 2012 at 8:45 AM

Everyone has a history of achievements and of failures…. Barack Hussein Soetoro-Obama should in fact be loud and proud of all of them….

Yet, most if not all of his supposed early years of high school, college, work history, legal cases as an attorney, and a Senator are muddled and murky and not the transparent as glass. lookie, lookie see what I have done….Here is my life and my record….

Bits and pieces like a patchwork quilt, we who have been requesting and waiting for the vetting to begin on a very shady life history. Birth.. (yeah, he was born…but there are problems with the biology and nationality of the parent(s)and the constitutional ability to become President of the USA. Names AKA’s legal or not so legal adoption and foreign passport to obtain passage to Indonesia and attend a religious school that is teaching the Muslim faith… which means partaking in that religions prayers and beliefs. Returning to America of what passport with what name? College records, loans and activities matter… Jobs and affiliations matter.

Clarification would stop the fact gap that IS the unknown of Barry-Barack Hussein Soetoro-Obama…. enablers and hidden transcripts, associations that have paid millions to scuttle and divert the truth of a mans history is a shameful and disgusting. Treasonous in reality.

Comparing Obama to a chair… insults the chair! at least with the chair there is a reasonable possibility that your can trace its roots.

ActinUpinTexas on September 4, 2012 at 9:38 AM

“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”

Right you are, Johnny Boy. That’s what the banks used to do, until the stupid-O-crats played the race card in order to sidestep normal sound business practices, and force them to write loans they knew they shouldn’t write. And the results were predictable: the people who shouldn’t have gotten loans in the first place–surprise, surprise–defaulted on those loans.

Come on, we all know that there are certain people who simply don’t pay their debts, who don’t take personal responsibility for ANY of their actions. And banks always knew that it would be foolish to extend loans to those people. The practice of giving such people loans was forced upon them, by the democratic congress (e.g., Barney “Hot Dog” Frank, Chris “The Dodger” Dodd).

uncle_fweddy on September 4, 2012 at 3:24 PM

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