Blog on the Run: Reloaded

Thursday, October 7, 2010 8:04 pm

“You have to infer some element of intent.”

It’s not the comprehensive writethru on the foreclosure-fraud scandal that I’ve been looking for, but this Q&A between ProPublica journalist Marian Wang and Geoff Walsh, an attorney with the National Consumer Law Center, adds some detail and nuance to the aspect of “robo-signers,” people with mortgage-servicing businesses who signed many, many foreclosure documents with little or no verification.


Wednesday, October 6, 2010 6:31 am

More on mortgage fraud

Filed under: I want my money back.,We're so screwed — Lex @ 6:31 am

Like Gibbs on “NCIS,” I don’t believe in coincidences. So I find it more than a little odd that just as news was beginning to break about the extent of the foreclosure-fraud crisis nationwide and the role that forged and/or fraudulently-notarized documents  may have played in the fraud, the following thing happened:

On Monday, September 27, 2010, U.S. Senator Bob Casey (D-PA), on the Senate floor, asked that the Judiciary Committee be discharged from further consideration of a bill that would hurt consumers. H.R. 3808 requires federal and state courts to recognize notarized documents from other states, including ones that contain electronic notarizations that are not subject to the same consumer safeguards of documents notarized in person. Some financial institutions are using electronic notarizations to process home foreclosure documents.

Sen. Casey asked that the Senate move forward with immediate consideration of the bill with unanimous consent that the bill pass with no other action or debate. The Senate passed the bill without amendment by unanimous consent. It now sits on the President’s desk.

In ordinary times, in times in which we have no reason to doubt the validity of legal documents in general (and foreclosure documents in particular), this measure would be unobjectionable, a means of reconciling centuries-old legal proceedings with 21st-century technology.

But these are not ordinary times. They are times in which fraud on a world-historical scale is running rampant. And if President Obama signs H.R. 3808 into law, the crisis will grow an order of magnitude worse.

I’ve written the president asking him to veto the bill. You can do the same here or call 202-456-1111. The president needs to veto the bill, and any similar measures that might land on his desk, until such time, likely years from now, when the current crisis has been addressed and a truly reliable system of documenting property transfers has been restored.

Because if you can’t even define something as basic as the concept of ownership, capitalism is done.

Friday, October 1, 2010 8:33 pm

Because some of our society’s most vulnerable weren’t getting screwed FAST enough, or something

It looks like mortgage foreclosure fraud has become a thing, and it’s about damn time:

Given that the IMF and others believe a large part of the “structural unemployment” in our country is related to the struggling housing market and underwater and barely-hanging on homeowners, what is to be done? One option is to allow for options like lien-stripping in bankruptcy courts, reseting mortgages by zip code, etc. Another option is for courts to accelerate foreclosures by ignoring due process, proper documentation and legal process in order to kick people out of their homes and preserve the value of senior tranches of RMBS [residential-mortgage-backed securities — Lex] while giving mortgage servicers a nice kickback.

What option do you think our country is taking?

We should all be very concerned about the foreclosure situation in Florida. If you are a homeowner or potential homeowner, you should find it offensive that people’s property rights are being violated in such a flagrant way. If you are an investor, either as “bond vigilante” or someone with a generic 401(k), you should be worried that servicers have gone rogue and the incentive structure to maximize value instead of fees associated with foreclosures has broken down.

And if you care about basic Western liberalism — the classical kind, with a Lockean understanding of freedom to own property along with freedoms of speech and religion — you should be pissed off. This is a clear-cut instance of the rich and powerful decimating other people’s property rights, rights that are supposed to protect the weak from the strong, in order to preserve their wealth and autonomy. Unless you think property rights are mere placeholders for whatever the financial sector demands are, this should be resisted. This should be viewed as a problem an order of magnitude larger than Kelo v. City of New London.

Funny, of course how you don’t seem to hear any of the people who were screaming so loudly about property rights after Kelo screaming about this. Well, except for me. Still …

The short problem is that banks are foreclosing without showing clear ownership of the property. In addition, “foreclosure mills” are processing 100,000s of foreclosures a month without doing any of the actual due diligence or legal legwork required for the state to justify the taking of property and putting people on the street. Even worse, many are faking documentation and committing other fraud in the process. The government is allowing this to happen both by not having courts block it from going forward, but also through purchasing the services of these mills. As Barney Frank noted: “Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?”

And the worst part is the lack of conversation about this. Thanks to Yves Smith at naked capitalism for following this story from the get-go; her blog has become the place for anyone interested in this topic (that link is a catch-up post). The rest of the media is starting to catch up to where she was weeks ago.

Zero Hedge has been following this, too, although to nowhere near the depth of Smith. ZH reported that the Ohio Secretary of State has made a foreclosure-fraud referral to the U.S. Attorney for the Northern District of Ohio, seeking a criminal investigation and that Sen. Al Franken, D-Minn., has written to Fed chair Ben Bernanke, SEC chair Sheila Bair, and Attorney General Eric Holder, seeking same.

But that won’t have nearly as much effect, anywhere near as quickly, as this: companies that insure titles to property are getting the hell away from this stuff just as fast as they can.

This story cries out for a write-through.  I may or may not have time to do one anytime soon. But if you don’t get it here, get it somewhere, because apparently bankster fraud has entered a whole new dimension.

Wednesday, September 29, 2010 8:15 pm

Now they’re not even trying to be subtle about it

Filed under: Evil — Lex @ 8:15 pm
Tags: ,

Banks are just stealing homes now. And the Florida Supreme Court, led by Charles Canady, the Republican former congressman who led the Clinton impeachment prosecution, is letting them do it.

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