The article that appears in today’s edition of Daily Finance is the most comprehensive and most accurate analysis of the failure of the Attorney General and their investigation of Fraudclosuregate done by any reporter yet. Everyone is sitting, watching, waiting for some grand solution to this multi dimensional problem. Everyone just assumes that someone will come up with the solution. No one is prepared for the very real possibility that there may not be a solution to this mess. I have spent years now fighting in this mess of a war, and I am absolutely prepared to say that there is no solution…..at least no solution that is anything short of revolutionary and very destabilizing…..but don’t take it from me….listen to the expert….
Ever since this fall, when the mortgage industry’s robo-signing scandal first broke, people have been aware that banks have been illegally foreclosing on homes.
Now there’s a huge fight over what to do about that, mostly focused on a 27-page proposal that was supposed to represent the consensus of the 50 state attorneys general, but apparently doesn’t. On top of that effort came a report of a “shock and awe” modification push from the federal government, but as Yves Smith at Naked Capitalism details, it’s neither good policy nor practical.
One feature of both the attorneys general’s proposal and the “shock and awe” maneuver is speed.
The attorneys general are in such a hurry to find a solution that they haven’t even investigated the banks: They’re just relying on consumer complaints to define the problem. Similarly, the shock-and-awe plan involves an impossible six month deadline. As Treasury Secretary Timothy Geitner explained to Congress: “All parties have a stake in bringing this to resolution as quickly as possible” and “It’s very important that we try to bring this to bed as quickly as we can.”