Administration Inches Closer to Rule of Law on Foreclosure Crisis

…with this statement from Robert Gibbs:

As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law. In addition to strongly supporting the investigation by the state attorneys general, the administration’s Federal Housing Administration and Financial Fraud Enforcement Task Force have [sic] undertaken their own regulatory and enforcement investigation into the foreclosure process.

This is stronger than the repeated statements from HUD Secretary Shaun Donovan.

Let’s hope the Administration includes individual banksters in that statement.

  1. jdmckay0 says:

    Let’s hope (…)

    I’ve developed a twitching aversion to that word. :(

    The notion of cleaning up one’s messes along the way, IMO, has always been a good one. The consequences of not doing so are in full evidence. This this is so many layers deep (just like Iraq now that I think about it), I don’t see how this can be constructively corrected… especially given current political environment.

    Wouldn’t be surprised if Stern has greased plenty of useful Repub pockets along the way.

  2. parsnip says:

    Speaking of WH memes and Shaun Donovan, I noticed the Florida Rocket Docket court pushing the same talking point as an excuse for ramming through foreclosures without due process. From the WaPo article of October 15th:

    It’s speed vs. skepticism for Fla. judges facing avalanche of foreclosure cases

    By Brady Dennis, Washington Post Staff Writer, Friday, October 15, 2010


    In Sarasota County, a little farther down the west coast, Chief Judge Lee Haworth has also made clear he doesn’t want judges simply rubber-stamping foreclosures. Yet he doesn’t want defense attorneys for delinquent homeowners using technical flaws in paperwork to delay justified and inevitable foreclosures.


    …Haworth – like other judges – said he must accept that the documents lawyers file in court were prepared in good faith.

    And he acknowledged that Florida’s judges cannot afford to tarry.

    “These neighborhoods are deteriorating in the interim,” he said. “The properties need to get on the market to get sold. We’re not going to sit on our hands. . . . We’ve got to keep a steady flow going.” [parsnip’s emphasis]


    Isn’t the point of this new investigation just another stalling tactic? The pushback to Axelrod’s statement the previous Sunday must have convinced the WH to move onto the next step of the usual PR delaying process.

  3. Arbusto says:

    Is it a change of heart or the Administrations typical head fake before allowing unfettered mortgage fraud to go unpunished or indemnified by law? That MERS et al are lobbying informing members of Congress of the benefits of untraceable re-conveyances and liens when Gibbs changes tone is a coincidence, right?

    • jdmckay0 says:

      Is it a change of heart or the Administrations typical head fake

      The later IMO, all that phrase overstates the sincerity of their intention IMO.

  4. bobschacht says:

    Financial Fraud Enforcement Task Force

    It would be really nice if they’d come out of hibernation and actually do something positive.

    But maybe I’m confused. Is their task to enforce fraud, rather than prosecute it?

    BTW, Diane Rehm show today on the Mortgage foreclosure crisis had some mortgage lender hack on today minimizing the problem. I think he hasn’t used the word “fraud” even once, and is resorting to all the usual circumlocutions (technical problems, sloppy paperwork, minor errors, etc.) as if it is a trivial problem and minimize it. What a jerk.

    Bob in AZ

  5. bobschacht says:

    During the first decade of the new century, we saw a massive transfer of wealth, in dollars, from the Middle Class to the Upper Class. This was not an accident.

    What is now set up to happen is another massive transfer of wealth in terms of Real Estate. What the hundreds of thousands of foreclosures are doing is to take wealth, in the form of property, from the lower Middle Class and make it available for purchase. But who can afford to buy? Why, the rich folks whose wealth increased so much during the past decade! They will buy up those foreclosed properties at fire-sale prices.

    We have seen some dandy graphics of wealth concentration in dollars over the past century. The same could now be done in terms of property, measured in acres or hectares: During the Clinton years, and the first Bush administration, more people owned more property than ever before. Since then, the direction has reversed, with fewer people owning more property than ever before. This concentration of the landed class will accelerate, and the Middle Class ratio between renters and owners will change direction, forcing more of the Middle Class to rent rather than own.

    We are headed in the direction of a landed aristocracy owning most of the wealth, and a growing number of landless Americans who are the modern equivalent of serfs.

    Bob in AZ

  6. cregan says:

    Since you are an experienced tea leaf ready, I am surprised you read this statement the way you did.

    It means nothing at all like you are thinking. It only means that they will assess some fines maybe or other sanctions, likely small time, on banks that didn’t have the proper paperwork through “provable” mal-intent. Not blogger “provable”, but provable to the bureaucrats.

    It doesn’t mean anything regarding foreclosures not going forward.

    In some ways, this is the proper course. If the ONLY reason sitting there in regard to foreclosing on someone who has not made any payments in many months is “paperwork” missing, wrong, filed incorrectly, etc. with mal-intent, the banks should be fined and sanctioned–though heavier than they will be. Enough to sting.

    People who are way behind are not going to get saved by paperwork–no matter how shoddy, etc.