Mortgage Foreclosures Explained
Paul Krugman does another bang up job explaining a complicated issue in yesterday’s New York Times.
This time it’s the mortgage foreclosure mess:
Seems that many on the right think that the lack of documentation for foreclosures (much of which was lost in the relay of mortgages from banker to banker) is no big deal and we should take it on faith that when the banks say someone has defaulted on the provisions of their loan, we should believe them.
We shouldn’t. Krugman explains:
This is very, very bad. For one thing, it’s a near certainty that significant numbers of borrowers are being defrauded — charged fees they don’t actually owe, declared in default when, by the terms of their loan agreements, they aren’t.
Krugman properly nails the Obama Administration for its obeisance to Wall Street:
True to form, the Obama administration’s response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved. Instead, it is asking the banks, very nicely, to behave better and clean up their act. I mean, that’s worked so well in the past, right?
As mentioned in the piece, there are some good ideas on how to deal with this mess:
…the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer. This would do a lot to clarify matters and help extract us from the morass.
Of course, this will happen over the screeching undead bodies of the greedy bankers who caused this mess in the first place.
So it won’t happen.
It may be naive thinking on my part, but wouldn’t it be better to have someone in their home, paying a mortgage than to foreclose and try to get only a fraction of the value back in this terrible market?
Anyway, this is yet another datapoint indicating the claims that Obama is the first American Socialist President — Not so much.
- Why We Need Government Regulation To Protect Americans (alan.com)
- Editorial: The Foreclosure Crises (nytimes.com)
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