Washington Policy Makers Resist Calls for a Big Fix in Foreclosure Crisis

Washington policy makers, who moved swiftly to calm markets during the subprime mortgage crisis in 2008, have resisted calls for similarly broad steps in response to concern that banks may have acted illegally to seize homes.

President Barack Obama and the federal agencies that share responsibility for housing finance are opposing calls for a nationwide foreclosure freeze, fearing further damage to the housing market. Even as bank stocks tumbled yesterday on concern that the mishandled loans will increase costs for lenders, the White House and federal regulators avoided any grand gestures designed to reassure investors.

Obama this week endorsed a coordinated investigation by attorneys general from all 50 states into whether lenders used false documents to justify foreclosures. Mounting a response on the federal level is complicated by the fact that responsibility for overseeing housing finance and foreclosure law is fragmented among U.S., state and local agencies, with no single regulator shaping policy.

"We can see all too painfully the results from that gap," saidClifford V. Rossi, executive-in-residence at the Center for Financial Policy at the Robert H. Smith School of Business at the University of Maryland.

U.S. regulators say they are aggressively investigating whether employees of lenders including Ally Financial Inc., JPMorgan Chase & Co. and Bank of America Corp. have falsified documents used in foreclosure proceedings.

Nice that they are mouthing these platitudes while the situation on the ground is that as a homeowner you would have to be ready to sue the bank to stop all foreclosure actions in order to make the bank prove they really have the documents which represent your debt and that they legally transferred the original note thru every intermediary. So all these people who can't afford their payments ... they need have 'their lawyers' on retainer? Who is kidding who?

This govt which got elected as if they existed to protect what they clearly believe is 'their' stupid electorate from rapacious profit and evil property, is not acting, will not act and cannot act in the face of what may well be a tacit conspiracy of wink and nod negligence and in terms of moneys, the largest in human history, because the bitter reality is that very large business, very large banks, very large govt all exist together in the same space, and WE DO NOT.

This is an ENTIRELY separate issue from whether these mortgages should have been let or not. In fact, an easy construct could be made that by allowing mortgages which could not be paid en masse, grouping them into bonds, euchring the system into re-rating these bonds highly, knowingly illegally transferring the debt notes, and believing all the while that the govt would be compelled to step in, in the right place, at the right emergency moment, and then be compelled to allow you proceed to illegally repossess the properties the unethically let, and illegally transferred debts represented to RE-SELL THEM at greatly reduced risk to well qualified buyers is the greatest scam of all time. Perhaps in the UNIVERSE.

TARP saved the bond market values the mortgages were based on since this market existed only as vaporous promises. Now the banks want the original assets as well. Assets they may not hold debt on legally.

SCREW THEM.

GET THE TAR HOT, PEOPLE.