WSJ: Investigating the Nationwide Foreclosure Mess

The Wall Street Journal looks into the nationwide investigation into the foreclosure mess that erupted in September over whether servicers violated state laws against deceptive practices by submitting affidavits and foreclosure documents without confirming the paperwork’s accuracy.

While federal officials also are examining the use of “robo-signers” and other mortgage-servicing procedures, the legal quagmire that is slowing foreclosure sales and snarling courtrooms likely won’t end until the 50-state investigation is resolved.

According to the WSJ, the investigation could lead to civil charges and inescapable pressure on financial institutions to rewrite a mountain of mortgages. Already, there are signs that state officials are working together closely to gain more leverage over companies such as Bank of America Corp., Wells Fargo & Co. and J.P. Morgan Chase & Co.

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Yet there also was a squabble over what to call the investigation, with some state officials preferring “inquiry” and others the word “effort.”

“I’m pleased when people are floating options and trying to look at alternatives,” Mr. Miller says with a smile and a shrug. “As long as they aren’t saying: This is the way it’s got to be.” In an interview last week, he pounded on a wood conference table in a show of mock aggressiveness.

Mr. Miller says the attorneys general will push to clean up the mess quickly, hoping it will boost confidence in the housing market. If the investigation drags on for a year, that would be too long, he says.

One Probe, 50 States, High Stakes

 

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  • The folks who made this mess, probably had/have no real idea exactly what they are about. I doubt there are all that many crooks involved just a lot of incompetents.

  • “…Tom Miller is confronting the reality of how hard it is to get all 50 state attorneys general to agree on anything.” —- One called the situation, “herding cats.”

    “The 66-year-old Mr. Miller, up for re-election Tuesday to his eighth four-year term as Iowa’s top law-enforcement official, leads the nationwide investigation into the foreclosure mess that erupted in September.” —– One has to wonder if this was little more than a reelection stunt. If it takes a task force of fifty state AGs an entire year to investigate this ONE issue, one has to conclude that the states were and are not prepared to investigate the massive problems which took place in the mortgage fiasco.

    It would be nice if the state AGs announced their agenda and the general program they will use in selecting companies to review. As to specific procedures, nothing should be revealed until the conclusion of the investigations.

    “Ten of the 12 state attorneys general on the foreclosure investigation’s executive committee are running for re-election or will be leaving office in coming months.” It is interesting that the AGs from California and New York will be out of office very quickly.

    Will this venture show how states can unify to take care of their citizens or will it reveal how divided the states and political parties are? It seems Tom Miller is doing this now so that in case of failure, it will be three years until his next reelection bid. While this methodology should be used, its effectiveness seems in doubt.

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