Hey, can we get the folks who rescued the Chilean miners to come help us? And by us, I mean Western Civilization.
The New York Times reported today that:
As the furor grows over lenders’ efforts to sidestep legal rules in their zeal to reclaim homes from delinquent borrowers, these and other banks insist that they have been overwhelmed by the housing collapse.
But interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials. The issue gained new urgency on Wednesday, when all 50 state attorneys general announced that they would investigate foreclosure practices. That news came on the same day that JPMorgan Chase acknowledged that it had not used the nation’s largest electronic mortgage tracking system, MERS, in foreclosures, since 2008.
That system has been faulted for losing documents and other sloppy practices.
The root of today’s problems goes back to the boom years, when home prices were soaring and banks pursued profit while paying less attention to the business of mortgage servicing, or collecting and processing monthly payments from homeowners.
Banks spent billions of dollars in the good times to build vast mortgage machines that made new loans, bundled them into securities and sold those investments worldwide. Lowly servicing became an afterthought. Even after the housing bubble began to burst, many of these operations languished with inadequate staffing and outmoded technology, despite warnings from regulators.
When borrowers began to default in droves, banks found themselves in a never-ending game of catch-up, unable to devote enough manpower to modify, or ease the terms of, loans to millions of customers on the verge of losing their homes. Now banks are ill-equipped to deal the foreclosure process.
“We waited and waited and waited for wide-scale loan modifications,” said Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, one of the first government officials to call on the industry to take action. “They never owned up to all the problems leading to the mortgage crisis. They have always downplayed it.”
I respect Sheila Bair. I think she’s one of the good folks but, waited? Waited for what? Some of the left over righteousness of the corporations that took from TARP but never found a way to hire or retain workers?
In order for things to get done, you have to stay on people’s ass. Bad language but good philosophy.
Did Baer think that anyone was ever going to “own up”? Have you seen the fate of whistleblowers? We live in a lawyered up, pr spin society. People aren’t even willing to make small concessions like the sky is blue.
We have plenty of experience destroying things: Iraq, banking and savings regulations, OSHA standards. Turns out that the way back from that isn’t guaranteed. In Iraq, millennia old artifacts destroyed, 100,000+ dead, destroyed infrastructure, botched public works projects, but what the heck, let’s destroy minimum wage, health care and public education, too. If at first you don’t succeed …
Take a deep breath. Peel self off ceiling.