Perhaps you’ve heard the line about not wasting a crisis. It means seize the opportunity to make big changes.
Well, the banks are doing just that: they are using their self-created foreclosure crisis to build pressure to dismantle judicial foreclosures. The bankers want it to be much cheaper and easier to take collateral with fraudulent documents. Which it is, in non-judicial foreclosure states.
Before I dissect an example from today’s news, I want to explain why I think the banker campaign to end judicial foreclosures is about easing fraudulent foreclosure, rather than, say, liquidating collateral quickly. It’s simply really”“ the banks aren’t swiftly liquidating the collateral they’ve already taken title to. The banks are letting the properties rot.
More than that: the banks are slowing foreclosures all on their own. Florida attorney Matt Weidner saw banks voluntarily dismiss some 50 foreclosure cases he defended in 2010. A year later, not a single one has been refiled, even though his clients remain in default. Or consider this anecdote from Michael Olenick of Seeing Through Data:
The last time I went to [Florida] foreclosure court with a reporter there was a borrower who thought the bank lawyer was his own lawyer because, he said, ” she really goes all out, even when the judge gets cranky, to keep me in my house.” The judge was cranky the bank attorney wasn’t advancing her case and kept arguing for sale delays (cranky’s an understatement; red in the face yelling at her) but she kept her ground.
I tried to explain to the defendant that she works for the bank and is supposed to be trying to take his house but he wasn’t having any of it. After a few minutes of that the bank lawyer came out of court and he said ” hey ““ I have to go ““ I have to ask my lawyer what to do now.”
Let’s be clear: the banks aren’t bitching about the Due Process accorded homeowners in court because the banks need to speed up foreclosures. No, the bankers want what they always want: to cut costs and reduce potential liability. And that’s easiest if they can manufacture fraudulent docs, as needed, and foreclose using them without hassle.