"Defective documentation has created millions of blighted titles that will plague the nation for the next decade.
-Richard Kessler, an attorney in Sarasota, Florida, who conducted a study that found errors in about three-fourths of court filings related to home repossessions.
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The out of control foreclosure machinery has officially been brought into the shop for repairs.
The real estate financing industry appears to have brought the same technical expertise that allowed automated underwriting of mortgages to an automated foreclosure process: Structurally flawed, rife with errors, guaranteed to fail — and in need if an immediate overhaul.
As we have seen, homeowners without mortgages have lost their home to foreclosure. That this legal impossibility actually occurred reveals the foreclosure process, especially in Florida (but other states as well)as little more than a legal conveyor belt, bereft of oversight, manned by parasitic law firms and over whlemed bankers.
It is Lucy on the chocolate factory line, only with Homes being repossessed instead of bon bons slipping by unwrapped.
This more than merely “flawed paperwork” — the entire process is problematic. It has reached such depths that numerous banks have voluntarily stopped foreclosures while they review their internal processes, and the methods used by local law firms they hire. Called Foreclosure mills, many of these firms employ illegal methods to their legal practices. They use robo-signers instead of reviewing documents reviewed by lawyers; they hire process servers with histories of fraud and criminality. In the pursuit of foreclosure profits, they have tried to turn the practice of law into a clerical act of foreclosure, repossession, and resale — consequences be damned.
We have continually argued all of the HAMP and foreclosure abatement programs are ultimately counter-productive, and benefit the banks, not the home owners. I have called for allowing the process to proceed naturally, letting prices fall to where they will. Further, We have never opposed the foreclosure process as a price discovery mechanism.
But what is going on in Florida and elsewhere is a national embarrassment. What is required here is a full blown investigation from the US Attorney’s office.
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Sources: Foreclosure Errors May Cloud Ownership of U.S. Homes Kathleen M. Howley Bloomberg, October 1, 2010 http://noir.bloomberg.com/apps/news?pid=20601109&sid=a5bktFClcWS0&pos=13
Foreclosure? Not So Fast ROBBIE WHELAN WSJ, October 4, 2010 http://online.wsj.com/article/SB10001424052748704029304575526182962738098.html
Foreclosures Slow as Document Flaws Emerge DAVID STREITFELD NYT, September 30, 2010 http://www.nytimes.com/2010/10/01/business/01mortgage.html
7 major lenders ordered to review foreclosure procedures Ariana Eunjung Cha Washington Post September 30, 2010 http://www.washingtonpost.com/wp-dyn/content/article/2010/09/30/AR2010093006563.html
Malpractice?
The bailouts prevented the rock from being turned over to see what was underneath. That’s a feature or a bug, depending on the seat you sit in.
Seems like someone’s slogan ought to be ‘We keep the house, you keep the debt.’.
Yeah…like you think that might happen…..Even if we did get an investigation all it would lead to is new laws…..absolving the banks of any wrong doing in the past. The country has become a joke and the banks are LEADING us right down that path. When you allow the laws to be made to protect the banks, when you allow the banks to make the laws, this is what you get… Just bring back Mark-to-market….enforce the damn black letter of the law and bankrupt these LOSER INSTITUTIONS…… Screw them.
BR said: “…This more than merely "flawed paperwork" "” the entire process is problematic. It has reached such depths that numerous banks have voluntarily stopped foreclosures while they review their internal processes, and the methods used by local law firms they hire. Called Foreclosure mills, many of these firms employ illegal methods to their legal practices. They use rob-signers instead of reviewing documents reviewed by lawyers; they hire process servers with histories of fraud and criminality…”
The mistype in the last sentence (I must suspect you meant ‘robo-signers’) actually identifies the situation even better. This process borders on legalized theft, resembling nothing so much as those Western movies and TV programs from the 1940s and 1950s when corrupt judges signed off on land and water-rights takeovers by well-connected cattle barons in the plot line. I’ve guess we’ve lived through all of this before if the story line was showing up in entertainment. That certainly doesn’t make it any easier on the individuals affected by this form of theft.
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BR: Freudian slip — I’ll fix above.
What should happen versus what will happen?
More money will be made from the housing bust than was made from the boom. We know about John Paulson, the cast of the Michael Lewis’ book, early house flippers, etc. Now $$$ will be made in different ways, mostly by gaming the system and suckering Fannie/Freddie (i.e. ultimately getting taxpayer’s $$$) Housing boom was a very fertile ground for fraud. But as least during the boom it was all structured, done relatively by the book (even if the numbers in the book were all made up such as stated/imagined income.) The housing bust is unraveling so fast, it’s so out-of-control of those who ought to be supervising it, that the fraud will flourish. A lot more fraudulent $$$ will be made during the bust than during the boom. More people will get hurt. There aren’t enough investigators/cops/FBI agents to track everyone down. Unless you use Stalin/Mao methods (execute the perpetrator, confiscate his family’s entire net worth to pay restitution) on the corrupt lawyers AND bankers, this will not be solved.
The US Attorney's office? The same office that stopped short of prosecuting the VP of the US for treason, even though every dog on the street knew he was guilty of the crime? The same US Attorney's office that hasn't recognized any actionable civil or criminal activities on the part of the banks despite the fact that virtually anyone who was involved, interested, or impacted (think taxpayers) by these blatant and obvious crimes and torts knows "” as a matter of fact, not speculation "” that the criminals are being protected? Somewhere, the scapegoats are starting to get a little nervous.
Get ready to see the full face of Corporatism. Get ready to see "laws" made on the fly through administrative actions by the executive branch, and then fully legitimized by the SCOTUS. This is where we will se the Unitary Executive theory put into full practice. Get ready for the official end of government by, of, and for The People, in the US. The Congress will be kept intact to give the impression of legitimacy, but will be as useful as a vestigial tail on a human baby "” whatever purpose it did serve in the past being long forgotten (in a sense, this has already taken place. After all, the Corporations already write the legislation that governs us).
What will The People do about it?
Nothing.
Who’s next?
Wells Fargo executive said he only checked dates on foreclosures documents By Vicki Needham – 10/03/10 11:19 PM ET An executive with Wells Fargo said he checked only the dates on up to 150 foreclosure documents he signed daily.
The admission was made during a deposition in May when the executive said he relied on co-workers to make sure the information was correct on paperwork, according to news reports Sunday.
The deposition of the Fort-Mill, S.C.-based Wells Fargo vice president, Herman John Kennerty, was reported over the weekend by AOL Daily Finance and obtained by The Associated Press.
rktbrkr:
Behold the birth of goats.
We do NOT need a full blown investigation from the U.S. Attorney’s office. That’s the last thing we need.
Thank you for that opinion minus any supporting evidence or argument. Do you care to expand that statement, or are you only going to leave us with a school yard taunt?
me or Rescission ?
Rescission.
The banks chutzpah and wide scale criminal activity will create a crisis that will require US intervention that will ultimately benefit the banks, they will prosper by screwing up (actually they’re “screwing over”). They have/are creating too big a mess for the states normal legal processes to deal with – and the states are likely to impose penalties and tough conditions on banks foreclosures.It will be far simpler for the banks to lobby DC than to have to deal with local pols who might side with their constituents at least in the sand states where the banks have done the most damage.
b_thunder Says:
"Unless you use Stalin/Mao methods (execute the perpetrator, confiscate his family's entire net worth to pay restitution) on the corrupt lawyers AND bankers, this will not be solved." ____________
Other than the execution part (replace it with a long prison sentence, at hard labor), that's EXACTLY how the laws SHOULD be enforced in the US (the laws, useless as they are, certainly accommodate such penalties). Stalin/Mao may not have had fair trials prior to summary judgement, but we don't have trials at all.
This is hardly shocking. This issue was raised a year or two ago, but was dismissed by most authorities as anecdotal, unimportant in number, or unimportant legally. But it is really another strong indicator of the moral, legal, and financial “wrongness” of Wall Street . Much as no one understood the CDO’s squared and the CDS’s, no one bother to analyze the legal implications of a sliced and dice mortgage. Why not? Because there was too much money involved.
I bet we could subpoena every legal department on Wall Street and in all the mortgage banks and find thousands of memos and letters from the lawyers expressing their reservations about the paper trails. Emails to CEO’s asking them to contemplate foreclosing on a mortgage which was tranched thrice and sold ten times, finally finishing up with investors in Japan, Dusseldorf and Dubai.
These clowns (Wall Street, Congress, the SEC and the Fed) are a blight on what we perceive to be America (of course, they are stars and poster children for the real America). They came up with a Ponzi scheme so frickin’ clever that they did not even need to shred any papers. We can have all the documents we want…no one can make any sense of it.
I propose a nationwide freeze on foreclosures and cancellation of all outstanding mortgages. Communist? Sure, but so what. I mean, so what after all the crap. Or we should all get on planes, boats, and trains and go back to Europe, Africa, Asia, and South America, leaving the whole shooting match to the Native Americans and see if they can fuck it up any worse than we did.
Corporatism is going to make Communism look like a day at the park.
Get ready for the official end of government by, of, and for The People, in the US. The Congress will be kept intact to give the impression of legitimacy
Petey-
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