Anthony Hall
The foreclosure paperwork debacle spreading among major U.S. lenders points to a simple, somewhat direct question: Can't these guys do anything right?
If it wasn't enough to fan the flames of the housing crisis in the first place or help Greece hide its rising debt from the European Union until it was too late or turn the derivatives market into a $600 trillion time bomb -- what day of the week is this? -- U.S. banks and the law firms that process their paperwork have been, apparently, so cavalier with foreclosures that documentation appears in court with forged signatures, a lack of confirmation on critical facts and a host of other tawdry items that explain why so many judges are bald -- they pull their hair out. Some foreclosures have been turned back because in the wild market of consumer debt, the lender trying to foreclose on the property turns out not to be the lien holder. For some judges, that turns out to be a bit too random for proper jurisprudence.
Can you say "low hanging fruit?" For a politician, say an attorney general running for a Senate seat, a big, bad, mean bank taking a family home from Mr. and Mrs. Registered Voter and their six kids four weeks before midterm elections and then forging the paperwork is like Christmas come early.
In Florida, where there have been 400,000 foreclosures this year, law firms that handle foreclosures in bulk have been termed "mills." In Washington, House Speaker Nancy Pelosi, D-Calif., said, along with 30 other California lawmakers, "It is time that banks are held accountable for their practices."
The group said the "excuses we have heard from financial institutions are simply not credible," The New York Times reported.
Attorneys general from several states have saddled up to meet the foe. In Texas, Attorney General Greg Abbott has written notices to 30 lenders warning them that "robo-signers," who sign documents quicker than Pete Rose signs a baseball, would not be tolerated. In Florida, Attorney General Bill McCollum has opened an investigation into the issue, albeit one that was set back Tuesday by a judge blocking a subpoena that McCollum had requested.
Three national lenders have given themselves reason to hold their heads up recently: GMAC Mortgage, JPMorgan Chase and Bank of America have suspended foreclosures in states that require a judge's signature to foreclose on a property. No doubt, the heat was on in the form of accusatory headlines and the scraping sound of carving knives being sharpened in state capitals and in Washington. Those lenders, wisely, are keeping public comments to a minimum. At least they got that part right.
In international markets Wednesday, the Nikkei 225 index in Japan added 1.81 percent while the Shanghai composite index gained 1.72 percent. The Hang Seng index in Hong Kong jumped 1.07 percent while the Sensex in India rose 0.66 percent.
Stocks on the S&P/ASX 200 in Australia rose 1.73 percent. In midday trading in Europe, stocks were also higher in Britain, Germany, France and Italy.
The FTSE 100 index in Britain rose 0.75 percent while the DAX 30 in Germany rose 0.51 percent. The CAC 40 in France gained 0.98 percent while the pan-European DJ Stoxx 50 rose 0.34 percent.
