The Recent Incidents Surrounding Foreclosures Should Not Come as a Surprise to Anyone
The recent incidents surrounding foreclosures should not come as a surprise to anyone. Bank of America is halting foreclosures across the country after reports pouring in of rob-signings sans any verification of affidavits. JPMorgan Chase is not seeking foreclosure judgments in 41 states until it has completed reviewing its documents. Iowa’s Attorney General Tom Miller has given the lead to a team comprising of all the states to review the allegations. Miller said that the matter is far more serious than simply a glitch in the documentations.
The new twist to the foreclosure crisis is again reminding all that the problems in the mortgage industry are fundamental and not superficial. America claims to lay great importance on ownership of property. But to many lenders this does not seem to apply. Their sole purpose has been to evict people from their homes as fast as items move down the assembly line. There is nothing humane in the system – it is all mechanical. The borrowers are not individuals with names but are cases with numbers.
In the trading game involving mortgages, millions of these loans have been sold over and over again at the speed of light. During the boom years the lenders set up mortgage mills and by forcible persuasion placed people into homes they could ill afford with the help of complicated mortgages that the borrowers could not understand. It became next to impossible to maintain these mortgages. The income of the borrowers were not verified when the loans were given and thus the long term capability of the borrower to be current remained a question mark. The lenders were not bothered. With single minded focus they were interested in seizing the property.
The core matter of robo-signings was that the lenders did not give attention to each foreclosure case but these too rolled through the mills like the mortgages did previously. There seems to be no other solution before any of those involved in this matter – the courts, the administration or the lenders. The only answer is to stop mass creation of mortgages and mass running of foreclosures through mills. But by resorting to this the banks will fall behind in their money-making spree. That is unfortunate but it is imperative that they repair what they have broken.
The mortgages will have to be sustainable so as to become assets and not liabilities for the individuals and the nation.
