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By Clive Crook
Published: March 13 2011 22:14 | Last updated: March 13 2011 22:14
Federal regulators and state attorneys-general are trying to reshape US policy on mortgages. About time. Policy up to now has been a shambles. It is one reason why the recovery has been so weak "“ and why the US housing mess is capable, even now, of snuffing out the expansion altogether.
The idea is to take advantage of the foreclosure scandals that hit the mortgage business last year. By then, the volume of foreclosures in the US had grown so large, and the process (because of loan securitisation) so complex, that formalities were often dispensed with. Rules were broken, documents lost, papers signed without being read. Homeowners had their properties improperly seized. As all this came to light, thousands of foreclosures were suspended, worsening the paralysis in the US housing market.
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