Mortgage Foreclosure "Disaster" Calls for Extreme Measures
We saw an "open letter" this morning from Marie McDonnell, who has been documenting mortgage fraud since 1991. After sixteen years in the trenches, Marie has some interesting things to say about what's really going on in the mortgage industry and the extreme measures required to put a stop to it. With her permission, here's what she had to say:
We need Congress to enact an emergency "disaster relief" program, overseen by HUD, to prevent the tsunami of foreclosures that is now in progress due to the unbridled greed launched and authorized by the Garn-St. Germain Act of 1982 which, according to the FDIC, was the first non-homeowner friendly federal legislation in history.
We need to start talking about this in terms that people can understand:
The implosion of the subprime industry gives us the best clues about what to do here: we are witnessing the most effective discipline that can be imposed upon rogue lenders by the market itself...finally! By cutting off the gravy train and stopping the supply of money, the industry is getting the message loud and clear in a heartbeat. (Mortgage Lenders Network, Ameriquest, New Cenruty, Fremont, ad nauseam.)
Consumer advocates need to organize their position and hold the Bond Market Association accountable for creating the supply lines that have fostered this travesty. The Mortgage Bankers Association, National Association of Mortgage Brokers, National Association of Home Builders and the National Association of Realtors have to take responsibility for their roles as does the SEC, Fitch, Standard &Poors and Moodys for hyping the investments that were build on air.
These are strong words but as the great English statesman, Edmund Burke once said:
THE MORTGAGE COUNSELOR
Raising the Standard of Truth in Lending
through Auditing, Education and Advocacy
We need Congress to enact an emergency "disaster relief" program, overseen by HUD, to prevent the tsunami of foreclosures that is now in progress due to the unbridled greed launched and authorized by the Garn-St. Germain Act of 1982 which, according to the FDIC, was the first non-homeowner friendly federal legislation in history.
We need to start talking about this in terms that people can understand:
- This is a pandemic that is inflicting catastrophic physical and mental illness on vulnerable children, women, minorities, elders, low-income and median-income families across the nation, but the Center for Disease Control has not yet identified and classified the virus;
- There is a criminal element to this problem which everyone is denying except when it comes to defrauding financial institutions;
- A pickpocket will get time in jail whereas the theft of mortgage payments, equity and real property from homeowners is a "civil" matter where there is no effective redress;
- As with 9/11, we are unprepared to deal with this crisis because we have never seen it before and don't have enough time to train nurses or set up triage centers;
- Disaster relief (shipping supplies and money) will only enable the predators to profit further unless we find a way to nullify these transactions and disgorge the illicit fees and finance charges;
- There are too many people in distress and too few advocates to assist;
- The banking lobby has got to go; there are too many US Congressmen beholden to big money and corporate interests who are profiting from the transfusion of wealth from the working to the capital class; we need to "clean house" if we are to correct this national disgrace.
The implosion of the subprime industry gives us the best clues about what to do here: we are witnessing the most effective discipline that can be imposed upon rogue lenders by the market itself...finally! By cutting off the gravy train and stopping the supply of money, the industry is getting the message loud and clear in a heartbeat. (Mortgage Lenders Network, Ameriquest, New Cenruty, Fremont, ad nauseam.)
Consumer advocates need to organize their position and hold the Bond Market Association accountable for creating the supply lines that have fostered this travesty. The Mortgage Bankers Association, National Association of Mortgage Brokers, National Association of Home Builders and the National Association of Realtors have to take responsibility for their roles as does the SEC, Fitch, Standard &Poors and Moodys for hyping the investments that were build on air.
These are strong words but as the great English statesman, Edmund Burke once said:
Marie McDonnell
"The only thing necessary for the triumph of evil is for good men to do nothing."
THE MORTGAGE COUNSELOR
Raising the Standard of Truth in Lending
through Auditing, Education and Advocacy
I agree with many of the points made by Ms. McDonnell. As a lawyer, owner of a small title company, and real estate investor, I've seen it all:
-clients lured into "easy credit" loans only to drown
-irrational property valuations used to prop up over-lending
-serious real estate professionals put out of the market to everyone's detriment
Of course I'm suffering in the market too. Nonetheless I have to ask if you really think that MORE regulation is the answer? Look, my experience with so-called consumer protection laws is uniformly bad, so I say let's not ask government to legislate markets, even if our goal is to look after the most vulnerable members of society. I say make the real culprits pay for their misdeeds in hard labor and watch the rate of mortgage fraud plummet.
People bought more house than they could actually afford, I think. Now the chips will fall where they may.
As a former realtor and current businessman, I would like to know exactly what law has been broken by anyone in the mortgage business. If no law has been broken, then we need to enact laws to prohibit unscrupulous lenders from operating. If no law has been broken, then we need to take pity on the poor uninformed consumers who made bad decisions and reflect back on "Buyer beware".
When our elected officials say that the federal government should provide 30 Billion dollars to bail out these poor disadvantaged homewoners, where is this 30 Billion dollars going to come from? They should be saying "we are going to have to ask those more fortunate to send more money to us so that we can redistribute their wealth. I suspect that if the Federal government stayed out of private financial matters, we might just have compassionate people of wealth share on their own with family, friends and relatives instead of being forced to share without their consent.