I’m shocked, shocked! Our elected panjandrums have discovered and the media has slovenly reported with considerable glee (if it bleeds, it leads) that, in processing millions of residential foreclosures, Robosigner signed off on files prepared for foreclosure by nameless employees (or machines). Anything which 47Attorneys General think is a good idea in the middle of a political season to beat most political seasons is, by definition, suspect. I hear fraud tossed around, I’m starting to hear criminal investigation tossed around. And they’re serious. I feel for the poor bastards deep in the bowels of those lenders, just doing their jobs, who may now become “targets.”
OK, in a perfect world if a loan goes into default, a real live sensitive caring human being working for the bank reads the entire file carefully, concludes that, indeed, Mr. and Mrs. Smith did own the property at 41 Horseshoe Drive, and did, indeed, fail to make the last six scheduled payments of principal and interest, and certifies the accuracies of the bank’s loan file for the foreclosure. That’s not the real world. The great tsunami of millions of foreclosures put paid to that.
If the banks’ processes have been flawed, then they should be attended to, but as the Wall Street Journal said in an editorial last week, the outrage over nameless bureaucrat A having signed documents instead of nameless bureaucrat B, when it is not at all in question that Mr. and Mrs. Smith defaulted on their loan, seems curiously disproportionate. The WSJ aptly observed that the cure for sloppy is to make sure that people who are wrongly foreclosed have remedy, not to halt the entire foreclosure, price discovery and re-pricing exercise which is critical to the recovery of the US economy, while wannabe governors make long, breathless and impassioned speeches on television. Do they really get what’s going on? They must, right?
So what I take from this is the disregard of the responsibilities of leadership and public service this signifies. People who know better (and one almost hopes the breathy outrage is feigned in this case) are fully prepared to throw the economy under the bus for populist cred. For sure, this isn’t news in the sense that it’s never happened, but the sorry repetition of this deal with the devil weighs heavily.
Bookend this with that afternoon in Congress a couple of years ago when the House passed a 90% excise tax on bank compensation, and it paints a picture uncomfortably close to Chavez’s Venezuela.
I can’t seem to find a way to make this funny and entertaining. It’s just plain scary. Washington is indeed, now the problem. Uncertainty over regulatory and legislative activity is a powerfuldrag on the economy. Standby, more is coming. Vigilance is necessary. This stuff cannot be left unchallenged. The path will just get steeper and rockier.
By Rick Jones.