Three weeks ago, this writer posted an article, "It is time for a moratorium on foreclosures"[1] with the primary idea being, "It would likely forestall bankruptcy proceedings for millions of people and thereby keep them in their homes."[2]
At the time of the article the idea of a foreclosure moratorium didn't quite resonate and received little attention. That was then. Now the idea of a mortgage moratorium is reaching fever pitch. Why? It has to do with revelations that have been made public during the two weeks since GMAC Mortgage, the fourth largest lender in the country, voluntarily suspended ALL foreclosures in 23 states. It wasn't because they all of a sudden became compassionate, altruistic and empathetic toward those in unfortunate circumstances. No, it was because they were informed of "flawed" foreclosure procedures in the processing of their foreclosures. Ever since, the "flawed" foreclosure problem has become a nationwide scandal. Meanwhile, JP Morgan Chase and Bank of America have also suspended their foreclosures in the same 23 states.
A big part of the "flawed" foreclosure process had to do with suspicious "notarizations" of the foreclosure documents submitted to the judge in charge of the foreclosure proceedings. Some cases had notarizations signed off BEFORE the legal documents were even written. Others had notarizations with "wildly different signatures"[3] from the SAME EMPLOYEE, thus invalidating the foreclosure. This has gotten the attention of Congress with House Speaker Nancy Pelosi saying, "It is time that banks are held accountable for their practices."[4]
Left unsaid in the current clamor is what about the millions of foreclosures that have already been processed and finalized particularly since the crisis of mortgage foreclosures has mushroomed in the last two years? If those properties contained "flawed" foreclosure documents, would the new owners of those foreclosed properties retain their "supposed" legal ownership? They could be declared NOT the rightful owners. How does that can of worms get sorted out? The legal implications seem staggering!
Is it too early to condemn the mortgage lending giants for continuing to conduct other fraudulent practices (though different in the latest scandal) that created the sub-prime mortgage bubble that burst two years ago? Not from here anyway.
There seems to be an unmistakable pattern going on directly related to laissez-faire deregulation, lack of oversight and enforcement that has resulted in widespread fraud. Quite simply, voluntary compliance of the law equals no compliance of the law. The prevailing attitude seems to be "nobody's looking over our shoulder, nobody is going to scrutinize what we're doing and the faster we can expedite "things", the more money we can make." And, there seems to be no association to the idea that any fraud is being committed.
That is moral bankruptcy! The line between right and wrong has become blurred, indistinct and distorted.
The real question is this; is this behavior confined only to the culture associated with big corporate operations or is it endemic throughout our culture?
If so, what does that say about us as a people?
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