Tuesday, November 30, 2010

courts and banks as partners in crime

A very helpful article here from Matt Taibbi of Rolling Stone on the mortgage-backed securities crisis, the foreclosure crisis that it spawned, and how banks are getting out from under their own bad decisions by fraudulently kicking homeowners out on the street, and all with the help of the judicial system.

There are several truths coming out of this story that I think most people have a hard time coming to grips with. The first is that, as I and others have said before, Americans have been trained since It's a Wonderful Life to think of bankers as accountants when we should be looking at them as used car salesmen. They're not trying to protect your interests, and their bottom line no longer depends on your prosperity. Remember for a moment that banks are also credit card companies and tell me they're not just trying to get you on the hook for as much as possible.

The second is that nearly every case of foreclosure in the United States now happens because the judge allowed the bank to commit fraud. Banks so completely f**ked the normal system of titles and paper trails with the whole mortgage-backed securities debacle that they can't prove which mortgages they own, and rather than try to untangle that Gordian knot of securities, they just forge the paper trail. If the judges were to insist on proper paperwork, two things would happen:

  1. There would be no more foreclosures

  2. All the big banks would fail. All of them.

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