Faulty towers

from David Ruccio

The current foreclosure mess has nothing to do with deadbeat borrowers. It’s all about the banks trying to clean up the mess they themselves made as quickly and cheaply as possible. And damn the consequences for homeowners and the rest of society.

(Click on the image to enlarge) 

Andrew Leonard challenges the hollow, self-serving pontifications of conservative politicians, Wall Street Journal pundits, and bank executives concerning the current mortgage morass. While many (perhaps even most) of the current foreclosures may not be in error, that doesn’t absolve the banks from pursuing their own profit-making agendas—in initially extending the loans, in getting the U.S. government to bail them out when the loans went south, and now in quickly foreclosing on those mortgages to improve their balance sheets. 

The only puzzle that remains is why the Obama administration hasn’t capitalized on the mess created by the banks, to make the case for a different economic agenda.

The widespread use of robo-signers, the epidemic of lost paperwork, the proliferation of lawsuits, the potential invalidation of mortgage-backed securities — everything points to a systemic problem. The only real question is how big the mess will get. The White House should be far more out in front. Right before an election, the administration couldn’t have asked for a development that better illustrates the necessity for tight government supervision of the financial sector and industrial-strength consumer protection.But maybe Obama’s just afraid of being called “anti-business” again.

Or Obama and his economic advisers have, once again, made the choice about which side they’re on.

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