A Washington Post editorial suggests the meme that deliquencies are the main concern for us to consider instead of ownership issues that are more fundamental and problematic. But the author also suggests the states are at fault for their antiquated registration system…
To be sure, the revelations of “robo-signing” and other sloppy or unlawful methods are disturbing. There are big lessons to be learned, especially about how mass securitization of poorly underwritten home loans may have swamped the states’ antiquated, cumbersome property registration and foreclosure procedures. It is also true that the scandal underscores the failure of the Obama administration’s efforts to prevent foreclosures.
But what matters most is whether the misconduct caused large numbers of people to lose homes they otherwise could have kept. And so far, officials have found no evidence of that. This is logical. The robo-signed affidavits at issue were part of a technical review of documents, not the actual determination of a borrower’s delinquency. By the time robo-signers put pen to paper, default had been well established. An ironic consequence of diverting staff to fixing affidavits now is that it leaves fewer people to modify salvageable loans.
I had to recheck the date of the piece, which is this Monday Oct. 18, 2010. Banks have suggested there are only technical glitches for mostly foreclosure procedures, but to simply bypass documenting property ownership without asking anyone is okay? Stay tuned for new slogans.
Robert at Robert’s Stochastic Thoughts says it more forthrightly:
They have decided that the time derivative (not the level) of house prices is more important than the principle that claims to own something should not be accepted without evidence.
They have the idea that the foreclosure mess is a bad thing and not good because it slows foreclosures (OK) and therefore we should just ignore massive widespread perjury and accept any banks claim to own a house just on their say so (and robosign so).
They assert that property titles are “antiquated.” Lenin thought the same and it didn’t work out so well.
All that is sacred is profaned all that is solid melts into CDOs of RMBS.
Update: How many times can a mortgage be sold? See Naked Capitalism for one answer.