Matt Taibbi’s on a book tour for his new book Griftopia (FDL Book Salon November 27), but he somehow managed to spend an hour at one of the “rocket docket” foreclosure hearings in Florida, ground zero for the foreclosure fraud crisis. And he used his typical colorful style to describe what happened there:
Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.
The rocket docket wasn’t created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.
The judge mentioned in this excerpt, Judge Soud, presided over the rocket docket in Jacksonville the day Taibbi sat in, and he claims to have never seen any evidence of fraud. In the first case of the day, the bank originally claimed to have held the mortgage note and to have destroyed it and to have lost it IN THE SAME COURT DOCUMENT. They returned to court having miraculously found the note, but the documents filed have the wrong dates on them. JPMorgan transfered the mortgage two months before they received it, according to the documents. Judge Soud, who remember has claimed never to seen a single case of fraud, grudgingly dismisses the case by the bank, but gives them 25 days to come up with new documents. For the third time on the same house. [cont’d.]
The banks basically get multiple chances to foreclose on the property, like a CEO getting to re-do his tee shot again and again and again until he gets it right. The only way to reduce the caseload is to rule for the bank, and the entire purpose of the rocket docket is to reduce caseload. So this is a completely rigged system.
Now, where I will differ with Taibbi is that he’s looking at a very special case in Florida, where they’ve set up these special foreclosure courts through the legislature. And because the industry is so thick with fraud, even they aren’t succeeding in speeding through foreclosures with every judge. Skepticism has crept into the system, and lawyers like the one Taibbi profiles are getting very adept at sniffing out the fraud. This is not hopeless. And actually, people like Taibbi writing about it for a large audience can be part of the solution.
The rest of the article mines territory we’ve already covered, from the rampant fraud in the securitization process, to the faulty underwriting standards in the loan pools found by third-party due diligence companies like Clayton Holdings, to the improper conveyance of the mortgage notes, to the investor fraud and the rampant tax evasion associated with the mortgage pools, to the woman whose house was broken into by the bank, to the screwed-up incentives of the servicers, to the fiction that the borrowers are just deadbeats anyway, instead of victims. We’ve basically been doing on a rolling basis what Taibbi lays out in one glorious article, and I for one am glad he did it. Because this story needs to be told about 10 million more times so everybody gets the message. We have allowed banks to act like two-bit hustlers and get away with it at the expense of people who end up stripped of everything they have. Everyone should be made aware of the consequences of that. One by one and by the millions, everyone is. And Taibbi and everyone else working this beat are just spreading the word.
Be sure to read all the way to the end, when Judge Soud goes after Taibbi personally for daring to speak to a defendant after her case ends.