You know there are times I feel like the tree that falls in the forest and no one can hear me. I rant and I rave and I research and I take some of the useful information unearthed by sharp-eyed judges around the country and I try to lay it out in an easy-to-follow trail of breadcrumbs. And except for the hard core and devoted band of commentors who show up in these threads (you, and the judges who inspired me in the first place, are what keeps me going, thank you from the bottom of my heart), I feel like the MSM just cannot get a clue.
Am I wrong? Is this not one the biggest damn stories of the decade? Predatory lending practices that put people, even people who could have afforded conventional mortgages, into exotic subprime mortgages, working in cahoots with venial appraisers to inflate an unsustainable housing bubble ought to be a big story, no?
The complete rewiring of the banking system to become dependent on servicing fees for profit rather than return on investment for profit, which destroyed the incentive for bankers to engage in prudent underwriting or lending risk analysis. In fact it de-incentivized doing so, thereby creating a climate where no grownups were in charge of evaluating the creditworthiness of mortgage lending (and other consumer lending). Sounds like a big story, no?
And when the securitization of these doomed-to-fail mortgages tanked the world economy, the true story of the origins of the toxic assets, wouldn’t that be Pulitzer material?
When a multi-billion dollar bailout of the banks holding these mortgages happened and when many of the securities composed of these mortgages WERE PAID OFF AT 100 CENTS ON THE DOLLAR, you’d think the traditional media would be all over the story how this plays out in terms of the underlying mortgage debt and whether that was paid off, right?
How about when people started getting thrown out of their homes, sometimes on the basis of fraudulent documents, certainly then, the traditional media would jump up and smell a good story that needs trumpeting?
Or, maybe a series about the failure of those banks to enter into good faith mortgage modifications?
Alas, aside from a few disconnected stories buried in the back pages of papers here and there, this story remains largely unreported and certainly no one in the press can seem to connect the dots.
However, all is not futile. Recently some events have made me think that at least Capitol Hill is reading along.
On June 22, 2010, Elizabeth Warren actually asked about the crappy rate of permanent mortgage modifications during the TARP oversight hearing. She later did some TV about it and last week held a blogger conference call about the new financial regulations bill and specifically called out the effect that blogging had on getting stronger regulation into the bill.
Even more impressively, the House Oversight Committee June 24, 2010, hearing included a grilling of the heads of the four largest mortgage lenders in the US about the failure of those banks to do meaningful mortgage modifications. The follow up questions to that hearing included a number of questions intended to shed some light on the more questionable foreclosure tactics.
I have been waiting and hoping that some ambitious team of investigative reporters would wake up to this story and go put it on the front page of a major daily paper and by doing so, get the general public educated and Capitol Hill all fired up about DOING something to keep people in their homes (thereby stabilizing the housing market and the overall economy, BTW). By some miracle, Capitol Hill has cut out the dead tree middleman and appears to be awakening to this issue without help from the traditional media.
I still would like to see broader discussion of this problem. I want homeowners to understand that they may have options and rights. I want them to be empowered to fight to keep their homes. I want state attorneys general and consumer advocates to get in the trenches with those homeowners.
This would benefit us all. It would stop the free fall in housing prices, bring stability to a sector of the financial markets that represents the single biggest asset in most people’s lives, and help to stabilize the overall economy.
[Earlier posts in this series and related links at FDL’s Foreclosure Fraud Resources]