Life is good for bankers, in good times and bad. When you commit massive fraud you get a slap on the wrist that barely eats into the profits realized from that fraud, and you get to decide who you’ve ripped off too. But, the icing on the cake is that you’ll never get caught for committing that kind of fraud again. Not that you won’t do the same thing. It’s just that you’ll get it made legal.
The top Republican on the House Financial Services Committee has tucked a provision into his mortgage finance reform bill that would create a privately held “National Mortgage Data Repository.” The repository would basically look like MERS, the bank-owned electronic database tracking mortgage transfers. The difference is that, while MERS’ activities have drawn legal challenges across the country, the National Mortgage Data Repository would have the force of statute to carry out the exact same behavior. According to the bill text, any document arising from this repository would be seen as presumptively legal, pre-empting state and federal laws on demonstrating the right to foreclose.
(via Naked Capitalism)
Read the linked post for the whole story. Boiled down, it comes to this. The bill would legalize MERS, and hand over to the banks the right to determine what is and what is not good evidence of their right to foreclose. They would only have to prove as much as they would require themselves to prove, and if that means that your house gets foreclosed by someone who has no documentary proof that you owe them a dime, well tough luck. Well, that’s not fair. They’ll always have documentary proof, because this bill gives them the right to manufacture it out of thin air.
By the way, many people did get their homes foreclosed when they were not in default. I had a case myself, which happened to have a happy ending for the homeowner. She successfully defended a foreclosure by proving that she had made payments to the lender and its successors, who succeeded each other in rapid sequence. The bank’s lawyer then wrote her a letter telling her that the bank realized it had lost the first time, but it still felt she was in default (she was not) and it intended to start all over again. In the end, we got money from the law firm for unfair debt collection practices and, sort of bizarrely, got the mortgage itself voided, so she ended up with the house and no debt. That happy ending is an outlier, however. This proposal would make sure such unusual events never took place, while enhancing the odds that people would lose their homes without cause.
It’s good to be a bank. Almost as good as being the king.
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