The Housing Mess
November 23, 2010
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The housing market remains in serious trouble with the foreclosure crisis increasingly front and center.
The evidence is clear that many people have been forced into foreclosure illegally. As Shahien Nasiripour reports:
The ongoing “turmoil” roiling megabanks and their faulty home foreclosure practices may represent deeper, more systemic problems regarding the origination, transfer and ownership of millions of mortgages, potentially putting Wall Street on the hook for billions of dollars in unexpected losses and threatening to undermine “the very financial stability that the Troubled Asset Relief Program was designed to protect,” a government watchdog warns in a new report. Recent revelations regarding mortgage companies’ use of “robo-signers” when processing foreclosure documents “may have concealed much deeper problems in the mortgage market,” according to the Tuesday report by the Congressional Oversight Panel, an office formed to keep tabs on the bailout. . . . In the worst-case scenario . . . the “robo-signing of affidavits served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure,” the panel said in its report. “In essence, banks may be unable to prove that they own the mortgage loans they claim to own.”
You can see statements by some of these robo-signers here. Among their admissions: they signed thousands of documents without reading them, have no idea of how many different companies they were signing for, and in some cases other people affixed their names to documents without their knowledge.
If you want to see some powerful images highlighting the extent of the housing/foreclosure crisis in the U.S. visit this site.
Perhaps the best illustration of the complexities that underpinned the securitization and churning of mortgages, and thus the housing bubble and its eventual collapse, comes from Dan Edstrom, whose job it is to perform securitization audits. He spent a year creating the diagram below, which illustrates what happened to his own mortgage.
Any guesses how this will turn out? One thing is for sure–millions of people are losing their homes and little is being done to help them.