I've stayed largely quiet on the foreclosure mess to this point, in large part because it's sort of hard to know where to start. So many people have taken so many liberties with the lending and foreclosure process that the result is just a head-shakingly labyrinthine disaster area that casts significant doubt on the health of our housing market going forward.
So rather than try to catch up with a ridiculously long blog post enumerating all the ins and outs of the situation and my feelings about them, I'm going to instead post this presentation from the Florida Attorney General's Office. It's both comprehensive and easy to understand, and it lays things out in a very clean way. The first 25 pages or so are essentially background, and it's followed up by significant evidence of fraud and other unethical or criminal behavior. Interesting and important stuff.
The next step, of course, is actually prosecuting some of these cases in meaningful ways, something that AGs in many states have thus far been reluctant to do. In many cases, their reluctance has stemmed from political pressure--politicians and companies alike (not to mention certain individuals) have a lot to lose from a "double-dip" in housing that proper prosecution of this fraud might cause, and they've shown that they are willing to go to great lengths to avoid it. But you can't allow these sorts of crimes to persist simply because you're afraid of the economic effects of stopping them--remember, that's in large part how we got into this mess in the first place.
Keep an eye on this case in the Massachusetts Supreme Court, which could potentially void certain foreclosures and score a "win" for homeowners' rights in this mess. We can't allow our rights to be trampled in order to ensure short-term economic (and housing market) stability. The rule of law and due process must be preserved at all costs, period; let's hope that's what happens here.
[The Big Picture]
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