Author James Kunstler, on the mortgage foreclosure moratorium slowly taking hold throughout America:
This new subplot concerning the paperwork itself, however, complicates things more than anyone expected, and real suddenly. So eager were the originators to pump-and-dump mortgages - to write up loans and immediately re-sell them to the chumps at Fannie Mae, Freddie Mac and elsewhere - that they got ludicrously sloppy. Instead of mortgage applications being signed by notaries, the lenders just set up signature boiler rooms where unauthorized factotums signed them by the forklift-load without anyone so much as glancing at the pages within. Whoops....Enter the lawyers for the foreclosees. Their mission: to either assist their clients in evading foreclosure, or at least stalling the process indefinitely, allowing said clients to occupy a property as a sort of court-sanctioned squatter possibly forever. For one thing, it's probably cheaper to pay a lawyer a couple of thousand bucks to roll his hoop through the courts for a year than to actually fork over a $4,500 mortgage nut each month on an under-water five BR four bath vinyl-and-chipboard contemporary - with the possible bonus outcome of the house's title becoming so hopelessly lost and unproduceable that two generations of title insurance investigators will squander their whole working lifetimes in fruitless searching... and by then, perhaps, the whole sordid, messy business will be forgotten, like an old forgotten patent suit filed decades ago by lawyers for a poor swindled nearsighted engineer, who has been pushing up daisies now in a lonely Michigan bone orchard since Alan Greenspan blew his last clarinet lick at the Five Spot.The title insurance business will take a dim view of these monkeyshines, you may be sure, but by then they will be out of business, too. And then won't it be fun imagining some future when every attempt to transfer property is just a shot in the dark... or else property won't be transferred at all, at least not legally. It seems we're developing a whole new and interesting relationship with the rule of law in this country. Increasingly, it's become optional. And what you finally get when you opt for that is a lawless society where people simply grab what they want via the barrel of a gun and smash whatever gets in their way. Our nostalgia for the Wild West may suffer as this occurs and no one is able to live a settled secure life anymore in the USA.
Eloquent hyperbole, at very least.
Seismic tremors ran through the financial industry last week as two banks--Ally Financial (formerly GMAC) and JPMorgan Chase--admitted to filing fraudulent documents in potentially hundreds of thousands of foreclosure cases. This is likely the greatest fraud ever perpetrated on the courts of this country. These banks have agreed to halt foreclosures in the courts of 23 states (in the remaining 27 states, foreclosures do not need court approval). And the jury is still out on whether more banks will come forward with similar admissions. In fact, late in the week, without admitting any wrongdoing, Bank of America announced it would also halt foreclosures in the same 23 states to review its foreclosure practices.
- Garry J. Wise, Toronto
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