More On Home Foreclosures
The home foreclosure mess heats up. I last wrote about it a couple of weeks ago. I thought banks might be purposely slowing down the foreclosure process. To put it simply, I was and remain skeptical about what's being reported.
If you remember, a few weeks ago, reports said that foreclosures were slowing down because it was discovered that people were signing documents in the bank foreclosure departments who hadn't really read the documents. Something seemed fishy about that. People sign documents all the time and don't really read them. In fact, I read an interview with a bank employee working foreclosures who claimed that, in fact, not everyone signing the foreclosure documents was responsible for reviewing the whole document. The idea was that the supervisor - one of the so-called "robo-signers," was only responsible to see that all the appropriate people had signed off. He wasn't responsible for actually reviewing the document itself.
Anyway, I started digging deeper. And now it looks like this issue may be BIG. What do I mean by big?
First of all, it's not going away. For example, for a while, the Wall Street Journal commented that the whole thing was nothing more than administrative screw-ups. They've said that the government was blowing the whole thing up. And, indeed, several banks announced they were stopping the processing of foreclosures. The attorneys general of all 50 states said they were going to investigate. Then the banks said they were starting up the process again. At which point the federal government said they supported the attorneys general investigations. So this drama is far from over.
So, first of all, it seems that too many powerful interests have decided they're not going to let this thing get resolved any time soon. They all want to score points.
But the second reason I don't think it's going away is that there's more to this story than just politics or some sort of fight between the banks, their regulators and the state and federal government. There's real substance to the story. And this is where I'm concerned. I'm wondering whether this might develop into a pretty serious threat not only to our economy, but also to our whole financial system.
Too dramatic? Maybe. The more you dig, the more you find opinions on both sides.
One side claims that what's being uncovered is illegal activity - including fraud - on an almost unimaginable scale. I'm reading some scenarios - from pretty level-headed, reliable sources - that kind of scare me.
The other side says that - even though this is more than just administrative sloppiness - too much is being made of the problems out there. They claim that people ought to calm down. There are pretty simple solutions that could take care of any problems.
What do I think? Well, right now I'm kind of torn. I want to believe that it can't be as bad as the scary scenarios. But I'm not convinced the whole thing will just blow over in a few weeks.
And let's not forget that the November elections are just around the corner. So if this is really serious, politicians really don't want that kind of distraction to take our attention away from their campaigns.
So rather than pass this off as nothing, and rather than dump my personal worry and anxiety on you (without good cause), I'm going to just organize my thoughts and see what I come up with based on the best evidence I can find. Then I'll tell you what I'm thinking.
What it comes down to is that I've got some additional reading and thinking to do on this whole home foreclosure mess.
If you remember, a few weeks ago, reports said that foreclosures were slowing down because it was discovered that people were signing documents in the bank foreclosure departments who hadn't really read the documents. Something seemed fishy about that. People sign documents all the time and don't really read them. In fact, I read an interview with a bank employee working foreclosures who claimed that, in fact, not everyone signing the foreclosure documents was responsible for reviewing the whole document. The idea was that the supervisor - one of the so-called "robo-signers," was only responsible to see that all the appropriate people had signed off. He wasn't responsible for actually reviewing the document itself.
Anyway, I started digging deeper. And now it looks like this issue may be BIG. What do I mean by big?
First of all, it's not going away. For example, for a while, the Wall Street Journal commented that the whole thing was nothing more than administrative screw-ups. They've said that the government was blowing the whole thing up. And, indeed, several banks announced they were stopping the processing of foreclosures. The attorneys general of all 50 states said they were going to investigate. Then the banks said they were starting up the process again. At which point the federal government said they supported the attorneys general investigations. So this drama is far from over.
So, first of all, it seems that too many powerful interests have decided they're not going to let this thing get resolved any time soon. They all want to score points.
But the second reason I don't think it's going away is that there's more to this story than just politics or some sort of fight between the banks, their regulators and the state and federal government. There's real substance to the story. And this is where I'm concerned. I'm wondering whether this might develop into a pretty serious threat not only to our economy, but also to our whole financial system.
Too dramatic? Maybe. The more you dig, the more you find opinions on both sides.
One side claims that what's being uncovered is illegal activity - including fraud - on an almost unimaginable scale. I'm reading some scenarios - from pretty level-headed, reliable sources - that kind of scare me.
The other side says that - even though this is more than just administrative sloppiness - too much is being made of the problems out there. They claim that people ought to calm down. There are pretty simple solutions that could take care of any problems.
What do I think? Well, right now I'm kind of torn. I want to believe that it can't be as bad as the scary scenarios. But I'm not convinced the whole thing will just blow over in a few weeks.
And let's not forget that the November elections are just around the corner. So if this is really serious, politicians really don't want that kind of distraction to take our attention away from their campaigns.
So rather than pass this off as nothing, and rather than dump my personal worry and anxiety on you (without good cause), I'm going to just organize my thoughts and see what I come up with based on the best evidence I can find. Then I'll tell you what I'm thinking.
What it comes down to is that I've got some additional reading and thinking to do on this whole home foreclosure mess.
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