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OpEdNews Op Eds    H2'ed 10/15/10

The Foreclosure Crisis Fiasco

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The attorney general's in all 50 states have come to question the validity of foreclosures in their respective states.

Whether it's forged signatures on the legal documents (affidavits), "robo" signings where many documents are signed consecutively by "others" (not by the legally authorized attorney) without checking the accuracy of the document (as found in testimony by these "others" when they were deposed in court cases challenging the foreclosures they wrongfully signed) or illegal notary signatures (they are required to witness the actual signing of the documents by the legally authorized attorney), the crisis in foreclosures is not going away anytime soon.

All this is further compounded by new legal challenges to foreclosures (see above) that have been finalized and new owners have purchased the foreclosed properties assuming they were free and clear. Then there are legal challenges as to the rightful holder of the mortgages that were foreclosed upon since many of these mortgages were "bundled" and sold together as securities (derivatives) to private investors it has often become impossible for the court to decipher who is the actual holder of the mortgage and whether that "assumed" holder has the right to bring that foreclosure to court in the first place.

As a consequence to these entanglements, Bank of America and JP Morgan Chase have now halted foreclosures in all 50 states. GMAC have put a moratorium on its foreclosures in 23 states.

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Yet the Obama administration refuses to endorse a nationwide moratorium on foreclosures warning of "unintended consequences". Incredibly, they're asking the industry to "unwind the problem" voluntarily. Such blather puts them squarely on the side of the finance industry over homeowners in this crisis (though this is hardly a surprise to those paying attention to the actual "deeds" performed by the administration as opposed to their rhetoric).

All this aside, one would think the mortgage finance industry would have learned a lesson from the sub prime mortgage meltdown and collapse they perpetrated in 2008. But when they got bailed out and nobody was held to account with no jail time for the miscreants as a possibility and with voluntary oversight of their dealings remaining the norm, it was all but guaranteed they would continue their wanton ways of greed inspired recklessness.

Phillip R. Robinson, the executive director of the Baltimore based non profit "Civil Justice" said it best saying, "When you have these kinds of issues, the integrity of the system has been damaged." A loud AMEN to that!

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The days of the staid old banker belongs to yesteryear. Even when one thinks they're dealing with a reputable banking institution, particularly over a new mortgage or the refinancing of an older one, that new mortgage will be sold to a larger mortgage holder and presumably "bundled" with other mortgages and sold as a security (derivative) to an investor.

Again, it's as if nothing happened in the fall of 2008.

The present mortgage foreclosure fiasco is just the latest symptom of a financial industry heading us toward the next bubble of their making and a subsequent new meltdown.

The only question now is we don't know exactly when it will occur (not whether it will occur).


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