Mortgage Servicer Industry High in the Saddle
October 10, 2010 Leave a comment
This problem of the essential fairness (instead of corruption) of the US foreclosure system was well known for years to those involved in the system. The huge number of companies and lawyers involved in this out-of-control system is a mirror of the system that helped us take out the failed mortgages.
Florida has evolved a system of fast foreclosure process that again favors banks, developers, real estate agents and associated industry that wants to rush through the foreclosures to clean out the bad debt, rather than finding a fair and permanent solution to the underlying problem. See my earlier post, Florida’s High-Speed Answer to a Foreclosure Mess – NYTimes.com.
The only solution to the problem is a scheme of national debt foregiveness (cancellation) of mortgage debt on a large scale. This will keep people in their houses, will protect the social foundations of our towns and cities, and help people who can, under no circumstances, move on to rental units. This will also keep house prices from falling even further (this is the big benefit of the system for people who have kept up their payments).
Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people’s homes as fast as possible, often without regard to the rights of homeowners.
As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.