Foreclosure Fraud Primer
by digby
Here’s a helpful simple primer on the mortgage fraud mess. It doesn’t go into all the details and gives short shrift to some of thecriminbality, but I think it gives a good accounting of the two emerging explanatory narratives.
I think the conclusion is correct:
So far, the Obama administration’s reaction has been unsatisfactory. After several years of claiming that it was doing everything possible to help Americans to avoid foreclosure (but failing to do so), the administration is now resisting a national foreclosure moratorium on the grounds that dealing with the foreclosure backlog is essential to restoring the housing sector to full health. In so doing, the administration has managed to give fresh blood to criticism of the White House as overly beholden to bank interests. But the tone has sharpened in recent days. The SEC and the administration’s Financial Fraud Task Force have both launched investigations in the past week. On Wednesday, HUD Secretary Shaun Donovan declared, “Where any homeowner has been defrauded or denied the basic protections or rights they have under law, we will take actions to make sure the banks make them whole, and their rights will be protected and defended.” But in the same press conference he also asserted that “we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.” That is simply nonsense. The widespread use of robo-signers, the epidemic of lost paperwork, the proliferation of lawsuits, the potential invalidation of mortgage-backed securities — everything points to a systemic problem. The only real question is how big the mess will get. The White House should be far more out in front. Right before an election, the administration couldn’t have asked for a development that better illustrates the necessity for tight government supervision of the financial sector and industrial-strength consumer protection.
The White House is readying to turn to starboard once this election is done (as they were going to do regardless) and this is just another way they can distance themselves from those who are blaming shoddy and fraudulent business practices and failed laissez faire economic policies for the nation’s economic problems. They believe that’s a losing position going up against the business friendly GOP. (Plus there’s the problem of money …)
But more than that, I think many Democrats either truly believe that the only solution to the problem is for people to suffer while the invisible hand sweeps all the garbage out (and its opportunistic plutocratic helpers skim anything they want off the top) or they are simply afraid of what these nihilistic economic terrorists of the financial elite will do if they are forced to pay the piper. It doesn’t bode well for the folks either way.
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