In terms of the effect you are likely correct that it will mean disaster, but in terms of law if you have people filing false affidavits and basing legal document on them it sounds kinda Acornish to me.

The question is does the solution meet the crime.

I support letting legitimate foreclosures go through the system and letting the markets deal with this, but…and this is a big but…the mortage industry in many cases sucks and GMAC and BOA are leading that suckage. Both these organizations cut corners and are being called on it now. I hear stories all the time about lenders not approving short sales (that make economic sense) only to immediately push homes into foreclosure at prices 30% lower than short sale offers. I know people who had a hard time getting pay off balances from these lenders, of lenders making mistakes and starting foreclosures on the wrong properties (out of confusion), and other craziness. This is not just populist reaction to foreclosure (although I am sure part of it is).

So I am not worried that holding BOA and GMAC’s feet to the fire and making them do their foreclosures properly is such a bad thing. There are not going to be a rash of windfalls to debtors (other than a few months delay), the foreclosures will eventually go forward. But not letting BOA or GMAC off the hook will also send a message to the rest of the mortage industry to make sure they are in compliance.

My grammar is off, but that is lack of coffee this morning.

You need to hold the banks and mortgage companies libel for any mistakes they made. But by the same token, people who falsely filled out their mortgage applications stating income they didn’t have or imaginary assets to secure a loan should also be prosecuted to the fullest extent of the law.

I agree with Charles Hill, it is a vicious circle – one of the most devastating debacles to befall our country. Think of how many years Barney, Chris and Maxine had to keep the fire under the brew. It will take decades to see this to the end, and that is assuming the American people are successful in stopping the “everyone deserves a home” mentality in Congress.

This is a Kate McMillan Moment. On the one hand we have leftoids and lawyers anxious for free houses and all that lovely money; on the other we find “lenders” who’ve been playing hide-the-peanut with mortgage securities and think keeping track of paperwork is for Little People.

You’re supposed to pray for an asteroid strike, not pick a side.

The problem with the market resetting is that the people foreclosed on can’t get back onto the market until their credit recovers, which will take several years. So foreclosure creates both an oversupply and supressed demand.

It may be too late to prosecute them for mortage fraud, but individuals who lied about income definitely should not be subsidized or rewarded by any government aid for the trouble they are in. For the most part they are not. They are deadbeats who abandoned their properties. They just walked away. The vast majority of people facing foreclosure now are those who lost their jobs, lost income, and are underwater more to circumstances than any bad acts.

Break the deal, spin the wheel.

Same here as it is in Bartertown.

And fuggedabout that BS that “the Feds made me do it”. They did not, although it’s a great sound-bite. 75% of those loans were written by mortgage brokers who (frankly) gamed the applications and (surprise, surprise, Gomer) got big commission payouts.

I wonder how Mr. McCain feels about all those investers who were sold “securitized” debt that was actually not securitized. Does he feel the institutions (Wall Street investment banks) that failed to live up to their contractual obligations should be liable to the investors they defrauded?

This article is pretty lame. What’s good for the goose (debtors must pay!) isn’t good for the gander (banks don’t have to honor their fiduciary responsibility to either their shareholders, investors, or clients.)

This article makes Robert Mccain look like an ignorant shill for the same people that Tea Party folks hate. Is he really this dumb, or does he just like their money?

Second thought: what about the economic consequences of higher interest rates? Interest rates factor in both risk and the time-value of money. Increase risk (by making houses more of an unsecured than a secured loan) and increase the time value of the loan (by increasing the time it takes to collect), and interest rates will go through the roof. High compound interest rates are NOT good for the poor – or anyone else!

This one is just a disqus test.

Their is a big thing that most people don’t konw about is that a lot of these mortgages are defective. When the mortgages were resold to other banks and and packaged into GSE, REIT, CDOS, mortgage bonds and other crap and resold all over the world and resold again like tradeing cards, THEY LOST THE PAPERWORK, as in deeds and assumetion docs. Also every time a mortgage changes lenders the paperwork must be updated each time and recorded at th co courthouse. This was not done in close to 40% of all the CDO’S ect, ect. This is the dirty little secret the banks have been hiding since 2007.

Stacy,

Wait ’til you read this: The Banks Are Destroying The Housing Market yep. And it has nothing to do with bad paperwork.

The banks are walking away from properties they own.

It’s not just liberals any more.

So, the theory is that if we don’t let banks submit inaccurate and unattested to paperwork — in other words, stealing a house through fraud and conversion, then we are abandoning the free market?

I understand that you are loathe to be on the same side as the people suing the banks. But on this one, the bank is just plain wrong. They have the money, they have the resources, they even have the advantage in court (and I’m not arguing against them having that advantage)… and yet they still decided to take the fraudulent shortcut? They get the harsh penalty. That’s how it works. That’s how it has to work, or we are back to the era of the robber barons.