Just Making Shit Up, Liberal Edition

I am so tired of this:

But everything old is perpetually new again for Obama supporters, so when David Axelrod went out to argue against a national foreclosure moratorium in light of what may be the largest fraud ever perpetrated on a court, tens of thousands of counts of fraud lined up in a row, we get the usual suspects like John Cole arguing that it’s just common sense to side with the banksters:

    That isn’t taking the side of the banksters, that is taking the side of common sense. What possible use could there be for a nationwide halt to foreclosures?

    I can understand selective moratoriums where states deem it necessary, but wouldn’t a nationwide moratorium on foreclosures be disastrous? Is there any precedent for this? Do they even have the authority to wave a pen and halt all foreclosures? Or is this where the magical bully pulpit comes in again?

What possible use could there be? How about preserving the very concept of property rights in the face of fraud on a scale literally unseen, prior to this, in all of human history?

I’m not siding with the banksters, I just don’t understand what good would come from a national moratorium. Forty state AG’s are on the ball, what exactly could a national moratorium do? The idea is to stop the bad foreclosures, not grind every single transaction in this sector to a damned halt.

You aren’t hurting the banksters when you do something like that. You’re hurting every single buyer and seller in the market. It would be catastrophic. On top of that, under what legal authority does the White House declare a moratorium on a specific type of business transaction? How would that happen? Who would be in charge of it? Geithner? Warren? Under what legislative or Constitutional authority?

And finally, I’ve spent pretty much every single day bashing the banksters. The idea that I’m now just siding with them to either show blind devotion to Obama or any other reason is just insane. This was one of the first blogs to really pitch a fit about the Notary bill last week. I’ve said it before, I’ll say it again- I say and do enough stupid shit that you don’t need to make things up about me. And there really is a fringe of the American left that has almost the same DNA as the teahadist right. “Just do it! You’re President! Make it happen!”

161 replies
  1. 1
    General Stuck says:

    Without reactionaries, no one would learn to duck.

  2. 2
    Steve says:

    What possible use could there be? How about preserving the very concept of property rights in the face of fraud on a scale literally unseen, prior to this, in all of human history?

    Someone actually wrote this? Columbus Day was fucking yesterday!

  3. 3
    MikeBoyScout says:

    Axelrod’s response could have and should have been more precise.

    There is no federal authority for a national moratorium, and until Congress provides it (yes, that would be never), responsibility remains with the states.

    John, you’re mostly correct and as best as I can tell not an avowed expert on finance nor law.

    Hang on big guy.

  4. 4
    taylormattd says:

    Your post is a slap in the face to Hillary.

  5. 5

    Congrats on your elevation to “usual suspect” status, JC.

    ETA: Looks like you’ve got a FYWP blockquote fail up there too.

  6. 6
    MikeBoyScout says:

    @@2 Steve:

    Was just telling the better half yesterday how I remember a newspaper story from the 1970s of a native American who showed up in Rome and claimed to have discovered Italy and claimed it for his tribe. I shall never forget that.

  7. 7
    Michael D. says:

    @Steve:

    Columbus Day was fucking yesterday!

    That was awesome and I didn’t even think of it till you said it. Not that anyone thinks of Columbus Day.

  8. 8
    General Stuck says:

    Only a moratorium on stupidity can save us now.

  9. 9
    debit says:

    Just got home after a hellish day, scanned the front page and am now calling, “Green balloons”. Christ on a cracker, I just want to crawl into a hole and not come out again until ever.

  10. 10
    wmd says:

    I was surprised it wasn’t an FDL post at the link.

    BTW, I’d like to put in a request for those of us facing bankruptcy and/or foreclosure: A link to help support progressive candidates with volunteer time. Phone banking via http://www.calloutthevote.com/
    2 hour shifts for good democratic candidates:
    House:
    Annie Kuster (NH-02) Beth Krom (CA-48) Bill Hedrick (CA-44)
    Manan Trivedi (PA-06) Ed Potosnak (NJ-07)

    Alan Grayson (FL-08) Raul Grijalva (AZ-07) Mary Jo Kilroy (OH-15)
    Tom Perriello (VA-05) Carol Shea-Porter (NH-01)
    Senate:
    Jack Conway (KY) Elaine Marshall (NC) Paul Hodes (NH)
    Russ Feingold (WI) Roxanne Conlin (IA) Joe Sestak (PA)

    Even those of us with nothing but time can make a difference. Balloon Juice can help by posting information on how to volunteer.

  11. 11
    Ed Marshall says:

    That guy doesn’t know what the fuck he is talking about in about five different ways.

    He sits there and bitches about Gitmo and state secrets and all that shit (and fine), but don’t do it under a “rule of law” flag. Well, guess what pal? You know what part of the “rule of law” is? The federal government will defend it’s laws in court. The Justice Department does not have an option to spike it’s own case. It’s unethical, and it’s a terrible, terrible fucking precedent.

    He doesn’t understand the mechanics of a home foreclosure either, but I’ve got to get the hell out of here and go home and can’t be bothered.

  12. 12
    RyanS says:

    But, but,but I dont wanna pay my mortgage bill next month.

  13. 13
    Napoleon says:

    As a real estate attorney I can authoritatively say that anyone that says the President can halt foreclosures is not only wrong but delusional.

    Now maybe, maybe, if Congress passed certain laws the President could do that for certain mortgages in certain circumstances (because it would almost certainly be carefully tailored) in the future for loans made from the date of the law forward.

  14. 14
    gene108 says:

    Sigh, I wish some liberals would just cock up and form a communist party. They hate the idea of profits, they think the Soviet Union, China, Cuba, North Korea, etc. failed because they just didn’t implement communism properly, and generally jump to attack businesses as a knee-jerk reaction to everything that happens.

    There are plenty of people defaulting on their mortgages. Those people should be forced into foreclosure. They bought something on credit, put that something up as collateral basically, and the creditor has a right to seize the collateral, if you stop making payments on your debt. That’s how our society works. That’s the law.

    For every hard luck case that’s out there of someone getting laid off and unable to find work and unable to make their house payments, there are probably as many cases of guys who are just strategically defaulting on their mortgages because it makes the most economic sense for them to stop paying the mortgage than it is to pay a mortgage that’s underwater.

    Hell, I know people who walked away from properties they planned to flip, because they bought it right as the housing bubble busted and didn’t want to pay the bank the difference on the a short-sale.

    Not every guy who is in foreclosure’s a fucking tough-luck case and the banks are probably going to do more for the neighborhood, by maintaining the foreclosed property so they can resell it than the owner who strategically defaulted on the mortgage.

  15. 15
    General Stuck says:

    @debit:

    I just want to crawl into a hole and not come out again until ever.

    Sorry, all holes have been foreclosed. “ever” is still available though.

  16. 16
    Michael D. says:

    @Napoleon:

    As a real estate attorney I can authoritatively say that anyone that says the President can halt foreclosures is not only wrong but delusional.

    Next thing you know, libtards will be asking for an executive order!

  17. 17
    singfoom says:

    I reacted to the news about the moratorium being fought by the White House the same way as Sears did, initially. It’s an emotional response to the large picture of inequality in this country, and an emotional response to the perceived notion that the administration is siding with the banksters.

    However, upon reflection, a full country wide moratorium would be horrific. It would fuck shit up for a lot of buyers and completely stall the market, making housing even worse than it is right now.

    With Warren and some state AGs getting into this, selective moratoriums or a clearer way to fight unfair foreclosures is a lot smarter.

    You’re right John, but it’s hard to argue with an emotional reaction. Not that the larger picture doesn’t deserve said rage.

  18. 18
    D-Chance. says:

    Continued goodness from HTC:

    Update: Since I started writing this, the White House and Elizabeth Warren both came out in favor of the State AG’s investigating the industry. Apparently 40 states are now involved; I can’t imagine the other 10 holding out forever. So, good news for O-bots: their exalted leader gets to force the hard work off on the tax-starved, understaffed states, and remain nobly above it all so that he can continue to bank bankster checks in his upcoming re-election campaign.

    Such moral leadership is truly a blessing on our nation.

    Thanks for giving a heretofore unknown a shout-out, Cole.

  19. 19
    Strandedvandal says:

    You do realize that these no-name f*ckwads are making a name and getting traffic off of you yeah?

  20. 20

    @wmd:

    I was surprised it wasn’t an FDL post at the link.

    The linked post links to FDL, HuffPo and Truthout, so it’s a six-degrees of Jane Hamshers of the Left kind of thing.

    ETA: @Strandeval: “You do realize that these no-name f*ckwads are making a name and getting traffic off of you yeah?” Considering they are running no ads and there are no comments yet, seems that plan is an epic FAIL so far.

  21. 21
    Midnight Marauder says:

    What’s really galling is the idea that reasonable can’t have concerns about a fucking unprecedented national moratorium on this issue without being accused of being in pocket of banksters. It certainly couldn’t be due to the fact that you, literally, have no solid idea if this is even something that can be feasibly executed within constitutional standards. Nope. Instead, you get obfuscating, obtuse arguments like this:

    So, to recap: according to the Obama Administration, as well as its online defenders, the fact that an entirely undocumented, private system has been illegally substituted for the long-established state and local system of land-ownership? Not a reason for a national moratorium on foreclosures. The fact that the title insurers could collapse at any time, bringing almost all home sales in the United States to a dead stop in a completely uncontrolled manner? Not a reason for a national moratorium on foreclosures. The imminent collapse of the entire mortgage backed securities market? Not a reason for a national moratorium on foreclosures. The potential for hundreds of thousands, perhaps literally millions of acts of fraud perpetrated on our courts? Not a reason for a national moratorium on foreclosures.

    This is a textbook case of arguing against positions that do not exist in the real world. In reality, the Obama Administration acknowledges that all of the aforementioned issues are problems, but they have questions regarding their constitutional authority to execute such a move. That’s it. Which makes this claim by John Sears:

    Is there literally nothing these people won’t defend, if perpetrated by the banksters?

    equal parts misguided histrionics and just patently fucking ridiculous.

    And then even when the Obama Administration comes out in favor of a plan of action, this is what you get from people like John Sears, who could pretty much never be satisfied with any political action by the Obama Administration:

    Update: Since I started writing this, the White House and Elizabeth Warren both came out in favor of the State AG’s investigating the industry. Apparently 40 states are now involved; I can’t imagine the other 10 holding out forever. So, good news for O-bots: their exalted leader gets to force the hard work off on the tax-starved, understaffed states, and remain nobly above it all so that he can continue to bank bankster checks in his upcoming re-election campaign.

    That’s a nice trick, right? Somehow, President Obama gets slammed for supporting the Attorney Generals investigating the situation, but John Sears will just totally pretend like he did not write Progressive Hero Elizabeth Warren’s name down in the same supportive column as President Obama.

    Truly, I’m at a loss for why one supporting the investigation gets slammed with a “Such moral leadership is truly a blessing on our nation” pithy comment, and the other just gets duly noted with resounding silence.

  22. 22
    El Cid says:

    Anyone mentioned this yet?

    Minutes Show Fed Leaning Toward New Stimulus
    __
    By SEWELL CHAN | New York Times
    __
    WASHINGTON — The Federal Reserve on Tuesday provided more evidence that a critical mass of central bank officials appear to favor additional actions to reinvigorate the lagging recovery, according to minutes released Tuesday of the Fed’s last policy meeting.
    __
    Most Wall Street analysts expect the committee to decide, at its meeting in early November, to resume the debt-buying strategy, known as quantitative easing, in which the Fed would buy government debt. But the minutes suggested that while that outcome is certainly possible, it is not a done deal.
    __
    In essence, the debate is between those who believe the Fed should act “unless the pace of economic recovery strengthened,” and those who thought action was merited “only if the outlook worsened and the odds of deflation increased materially.”

  23. 23
    Davis X. Machina says:

    You guys think small.

    We don’t need a foreclosure moratorium, we need a bank holiday. Shut ’em all down. For an indefinite period. Because, fuck yeah!

  24. 24
    Midnight Marauder says:

    @singfoom:

    You’re right John, but it’s hard to argue with an emotional reaction.

    This one is really not that hard to argue against.

  25. 25
    FlipYrWhig says:

    @Midnight Marauder: It’s cheap and easy to demand things, isn’t it? And the best part is that when someone asks, “Um, can that even happen?” — well, THAT guy just outed himself as an impure quietist and all-round lesser being! Bwahahahaha! In your face, world! Here comes another uncompromising activist!

  26. 26
    singfoom says:

    @Midnight Marauder:

    Let me clarify my point. When the other person you’re arguing with is having an emotional reaction instead of logically going over the argument in question for evidence or rebuttals or what have you, even the most skilled debater won’t successfully change their mind.

  27. 27
    TaMara (BHF) says:

    John, when did you become everyone’s favorite punching bag?

  28. 28
    Omnes Omnibus says:

    Blag! Argle splurk npok ecto wiki wiki fweetanh sloup!

  29. 29
    Odie Hugh Manatee says:

    The “usual suspect” really made me lol. Ya gotta target painted on yer back there Johnny Boy!

    Duck!

    John mnbal but he is pretty much on target on this. Targeted halts rather than a nationwide halt would cause far fewer problems for the market. I don’t think there will be any stopping the tsunami of shit that is coming but I see no need to bring the wave on all at once. As far as Axelrod phrasing it better, it wouldn’t have mattered one bit to the manic progressives. They would have parsed what they wanted out of any statement no matter how it was worded.

  30. 30

    @TaMara (BHF):

    John, when did you become everyone’s favorite punching bag?

    Apparently, he is considered the progressive equivalent of David Broder or something.

  31. 31
    Joe Beese says:

    Got that, Cole? 450k potential cases of fraud on the courts in one state alone. One state! How on Earth are we supposed to deal with this on any level but nationally?

    When you recover your strength, Mr. Cole, perhaps you can answer that question.

    Then again, perhaps you can’t.

  32. 32
    Midnight Marauder says:

    @singfoom:

    Let me clarify my point. When the other person you’re arguing with is having an emotional reaction instead of logically going over the argument in question for evidence or rebuttals or what have you, even the most skilled debater won’t successfully change their mind.

    Well said.

  33. 33
    Singularity says:

    I was all prepared to get indignant in defense of JC over at that guy’s website, but I guess I kind of understand the outrage that fuels his extremely uninformed, misguided, and (most of all) misdirected anger. Frankly, I have an overwhelming urge to grab a pitchfork and a torch whenever I think about what these sociopaths have done.

    This understanding doesn’t allow me to excuse the fact that liberal purists seem to have no sense of how the world really works.

  34. 34
    Punchy says:

    Face it Cole, you made a stupid post, a whole host of people called shenanigans, and you refused to back down (that I saw). Now people are openly clowning on your take. Admiting errors is noble.

  35. 35
    Jim, Foolish Literalist says:

    @arguingwithsignposts: actually, he seems to have some kind of grudge against FDL, I couldn’t get interested enough to read all the posts, but I think they’re like totally The Man, stickin’ it to him for keepin’ it real

  36. 36
    Davis X. Machina says:

    @Singularity: Which makes one wonder if they’re quite the ones you want to determine precisely how many and which bankers you can give tumbrel rides to, consistent with actual money still actually coming out of my actual ATM.

  37. 37

    @Joe Beese:
    perhaps you should look up the meaning of the word “potential.” From the quoted article:

    For context, approximately 450,000 foreclosures have been filed in Ohio since 2005, and potentially all of them used this robo-signing process.

    Not all of those 450,000 were filed by GMAC, who is the target of the lawsuit mentioned in the article.

    For the sake of analogy, 310 million people live in the United States. Potentially all of them will get the flu this year.

  38. 38
    John Cole says:

    @Punchy: Do you just cut and paste that same comment in every post?

  39. 39
    John Cole says:

    @arguingwithsignposts: And when he is done, he could explain what national institution has the wherewithal to deal with 450k fraud cases. And at the same time, be up on the varying state laws at the same time. Oh, and again, where the authority to impose the national moratorium comes from.

    But again, this is Joe Beese.

  40. 40
    Midnight Marauder says:

    @Joe Beese:

    When you recover your strength, Mr. Cole, perhaps you can answer that question.
    __
    Then again, perhaps you can’t.

    What’s amazing about your idiocy here is that you completely ignore the fact that the states have a process in place to handle these matters, albeit one that will be overwhelmed given the sheer volume of cases. However, such a process does not have a federal equivalent and may not even be constitutionally permissible.

    Even more hilarious is that you literally cannot provide an answer to the question of how a nationally handled moratorium would be more logistically favorable to handle these cases rather than allowing the states to take the lead.

  41. 41
    Bruce (formerly Steve S.) says:

    Would any of us have heard of this guy if you hadn’t linked to him?

  42. 42
    lol says:

    @Joe Beese:

    Key word: “potential”, not “actual”.

  43. 43
    Midnight Marauder says:

    @John Cole:

    And when he is done, he could explain what national institution has the wherewithal to deal with 450k fraud cases. And at the same time, be up on the varying state laws at the same time. Oh, and again, where the authority to impose the national moratorium comes from.
    __
    But again, this is Joe Beese.

    I cannot lie to you. I would gladly beat up on Joe Beese all day for his everlasting idiocy and enjoy every minute of it.

  44. 44
    singfoom says:

    @Midnight Marauder:

    Example A for my point. @Joe Beese would CRUSH CRUSH these fools with his rage. It’s understandable. But seriously, as MM has asked the ragers, how exactly would a national moratorium be more beneficial than the states handling this? How would it *NOT* destroy the housing market any further?

  45. 45
    Tonal Crow says:

    @gene108:

    Sigh, I wish some liberals would just cock up and form a communist party. They hate the idea of profits, they think the Soviet Union, China, Cuba, North Korea, etc. failed because they just didn’t implement communism properly, and generally jump to attack businesses as a knee-jerk reaction to everything that happens.

    Lighting so many strawmen make it too hot under the bridge today?

  46. 46
    Cacti says:

    I’m becoming increasingly convinced that a large segment of the American population thinks the President is, in fact, a Monarch and can just make it up as he goes along.

  47. 47
    4tehlulz says:

    I don’t see what the issue is. If you stop all foreclosures, I doubt that banks will do anything like, say, freezing the credit markets solid.

  48. 48
    LT says:

    I don’t get it. At least part of your argument is that it’s right to not do a national moratorium – because maybe he can’t? Well, what if he can?

    And:

    You aren’t hurting the banksters when you do something like that. You’re hurting every single buyer and seller in the market. It would be catastrophic.

    First, you are most certainly helping a whole lot of people who have been defrauded. And you could argue that massive mortgage fraud is already a catastrophe. One that leads in favor of banksters.

    And just my observation: this has got to be part of a reaction to what seems at times a reflexive reaction by you toward people who go after the Obama administration. One example: I didn’t see you write about it, but the recent revelations (you might see them differently, and fine) about just how early the administration gave the public option away kind of destroys hurts your recent headbanging over that issue, don’t they?

  49. 49
    Mnemosyne says:

    @arguingwithsignposts:

    I think this is like when people were freaking out because TARP potentially put the US in danger of having to pay ELEVENTY-BILLION DOLLARS! if every single loan on the books of every single bank in the entire US went toes-up all at once, so people were running around insisting that we actually owed that eleventy-billion dollars due to TARP because shut up, that’s why.

  50. 50
    El Cid says:

    @Tonal Crow: In fairness, China didn’t fail and is a major destination for US investment and manufacturing [though it’s not Maoist Communist any more and more of an authoritarian mixed state-soshullist and capitalist investment economy], and Cuba is not doing great but it hasn’t failed, and is actually attracting foreign investment from European companies.

  51. 51
    LT says:

    And when he is done, he could explain what national institution has the wherewithal to deal with 450k fraud cases.

    It kinda sounds like you’re saying that it’s too big to handle, so fuck it. I know you’re not, but how else should we take that?

  52. 52
    Punchy says:

    @John Cole: Somebody’s gotta be a contrarian in this thread. Otherwise, all you have is 200 commenters tongue-bathing you. And we cant have that.

    I also think there should be a federal moratorium on large hairy men cutting their grass shirtless.

  53. 53
    ruemara says:

    @wmd:
    I would, but I’m working near full time to work part time so I can fall through the cracks of life slower. Motherfucking green balloons already, fates.

  54. 54
    Jim, Foolish Literalist says:

    @LT:

    bout just how early the administration gave the public option away kind of destroys hurts your recent headbanging over that issue, don’t they?

    Sure, as soon as you list the sixty votes the PO had in the Senate.

  55. 55
    John Cole says:

    @LT: Why does everything turn into psycho babble?

    I’ve stated some pretty clear cut reasons why I think a national moratorium makes no sense, and you blow right by those issues and reduce everything to my need to defend Obama.

    And I wasn’t defending Obama when I started discussing this, I was simply pointing out that they were lying about what Gibbs said. Or is lying in defense of mythical good a virtue now?

  56. 56
    General Stuck says:

    @LT:

    One example: I didn’t see you write about it, but the recent revelations (you might see them differently, and fine) about just how early the administration gave the public option away kind of destroys hurts your recent headbanging over that issue, don’t they?

    He and the other FP’ers wrote about it a number of times a few days back. Few here put a lot of cred to Daschle, and I am surprised the left wing does now, after declaring him corporatist non grata quite a while ago. Obama couldn’t give something away not his to give away. Congress passes the laws in this country, and Obama can veto or not.

  57. 57
    LT says:

    @Jim, Foolish Literalist:

    Sure, as soon as you list the sixty votes the PO had in the Senate.

    Because that’s how many it normally take to pass legislation, or because that’s (not) ho many it took to pass the final legislation?

  58. 58
    4tehlulz says:

    @Punchy: You just made Andrew Sullivan sad.

  59. 59
    Cacti says:

    @LT:

    Well, what if he can?

    He can’t.

    Completely unconstitutional and would receive a well-deserved judicial smackdown from the first court where the preliminary injunction was filed.

  60. 60
    Ailuridae says:

    @Jim, Foolish Literalist:

    Sure, as soon as you list the sixty fifty votes the PO had in the Senate.

    FYP

  61. 61
    Steve says:

    What the hell does 450,000 “potential” cases of fraud mean? Gee, every single foreclosure case in the state of Ohio might involve forged documents! We can’t rule it out! Where is your solution to this imaginary problem, John Cole?!?!?

  62. 62
    LT says:

    @John Cole: You’ve stated some reasons, and I questioned you on the “They might not even be able to do it!” opne, which I think is pretty weak. What if they can?

    And hey, that’s my feedback. I read your blog, a lot, and, especially in the last six months or so, it seems to me that you at least sometimes reflexive go after people, especially on the Left, who go after Obama. Is it possible that there’s a grain of truth in that?

  63. 63
    Punchy says:

    @4tehlulz: I’m afraid I may have also further pissed off John.

    If dealing with BofA’s mortgage division is anything like their CC dept., I’m surprised nobodys Molotov’d their HQ.

  64. 64
    dday says:

    Just to address the issue at hand, there is constitutionally permissable recourse for the federal government, though not simply the President with an executive order, to issue some sort of moratorium to cover foreclosures. First of all, they could ban foreclosures on the mortgages the government owns or otherwise guarantees, through Fannie and Freddie. And that’s around 97% of all mortgages. The Financial Stability Oversight Council ushered in with Dodd-Frank could shut down foreclosures if they assert that continuing them amidst the mass fraud would constitute a systemic risk. Independent regulators like the FDIC or the OCC could potentially enact foreclosures on the parent companies of the servicers, which they regulate. Finally, Congress could pass something that denies states funding unless they freeze foreclosures.

    But as I said earlier today, the chief executive could not accomplish such a moratorium by himself.

    Let’s also recall that moratoria have occurred during the last couple years, including a big one in California. And since the banks themselves are doing the pausing, with more likely to follow, arguing about the impact of moratoria is kind of irrelevant. The banks affected obviously see value in them, they’re not doing them to be nice. I think the whole focus on the Administration’s position is misplaced, though I think their argument sounds to me like “so what if the cops planted evidence, surely the murder suspect committed some crime.”

    On the “potentially 450,000 foreclosures” issue, which I also wrote, I think there’s ample evidence in the record that the fraudulent foreclosure processes were systemic and industry-wide. Pretty much every major servicer used MERS for securitization, which set this whole thing in motion. I was hypothetically playing out the implications of an industry-wide penalty under Cordray’s lawsuit, which I find perfectly acceptable.

  65. 65
    Mnemosyne says:

    @LT:

    It kinda sounds like you’re saying that it’s too big to handle, so fuck it.

    No, he’s saying that the feds don’t have the resources to handle it but the states do, so there’s no point in yanking the cases away from the states and tying them up while trying to create a brand-new bureaucracy to deal with them when the states could have been dealing with them all along.

    If the states want to request extra money and resources from the feds to help them in the prosecutions, the feds should get it to them toot sweet, but there’s no reason to federalize the investigation just because it sounds real good.

  66. 66
    General Stuck says:

    @LT:

    sometimes reflexive go after people, especially on the Left, who go after Obama. Is it possible that there’s a grain of truth in that?

    Is there a grain of truth that sometimes (a lot) people on the left go after Obama reflexively?

  67. 67
    joe from Lowell says:

    I can understand the emotional appeal of a foreclosure moratorium. Really, I can, both in terms of the banksters and their predatory mortgage scams in general over the past few years, and because of this truly sickening abuse that’s come out of GUESS WHERE? Florida over the past few days.

    But if you actually understand the implications here, you just can’t do it. You screw too many people, and screw too much up. We’ve got to sit tight and let the state AGs and the courts handle it, as much as that might suck to hear.

  68. 68
    LT says:

    @Cacti: Well, okay, blog guy called Cacti. I’ll just take your word for it.

  69. 69
    John Cole says:

    @dday: Thanks, DDay. Any idea what they would do after a hypothetical moratorium was imposed? Who would be left to sort it all out? How long would it last or need to last? Wouldn’t this just blow the battered real estate market into all hell? Or is the systemic risk a greater threat?

    And it goes without saying the Republicans would object to this just to make sure nothing positive happens.

  70. 70
    Martin says:

    There’s a ‘STOP SOÇIALISM’ Google ad running, and I bet it didn’t get stuck in moderation.

    Cole hates his commenters.

  71. 71
    Francis says:

    IAAL also. No, there’s no authority whatsoever for the President to impose a national moratorium on foreclosures. The closest thing I can think of is Truman’s attempt to seize steel mills. That didn’t work.

    Imposing a foreclosure even with Congressional authority would have the tiny [sarcasm] problem of violating the Separation of Powers doctrine — you know, the one that says that the court system is co-equal to the Executive. No judge, federal or state, would even consider for a moment an order from the President to stop processing foreclosures. What’s worse, foreclosures are State law proceedings (in most cases). The President’s power over State courts is even more tenuous than his power of federal courts; they’re not even in the same system of government.

    Yes, the President can urge the state AGs to investigate for fraud and abuse of process. He can even urge the fed AG to see if there are federal civil rights violations or possibly RICO causes of action. But the fact that the banks are running around violating laws does not mean that the correct response is for the President to do the same thing.

    on edit — I flatly disagree w/ dday’s claim that the federal government could impose a moratorium on FandF-guaranteed mortgages. Guarantee does not imply ownership or control.

  72. 72
    MikeBoyScout says:

    2 points.

    1) Because of the shear amount of stupidity and fraud at the front end of the mortgage securitization process, there never was a good way to deal with Big Shitpile. Foreclosuregate is the outcome of our self regulated financial system.

    2) The housing market is F*CKED for the next decade (maybe more) no matter what.

    While HAMP was a major Obama screw-up, there are no easy fixes to the hell wrought by Republican led government.

    REMEMBER IN NOVEMBER.

  73. 73
    lol says:

    @LT:

    The health care bill needed 60 votes to pass and that’s what it got. The sidecar bill that only addressed budgetary issues (and the Nebraska payoff) went through reconciliation.

    Even assuming the public option could pass muster for reconciliation (unlikely), it didn’t have 50 Senators on board to pass it that way. Period. Remember that big whip count towards the end that the blogs were doing? Remember how it stalled in the mid-40s? I guess you don’t.

  74. 74
    LT says:

    @General Stuck:

    Is there a grain of truth that sometimes (a lot) people on the left go after Obama reflexively?

    Yes. And?

  75. 75
    General Stuck says:

    Imposing a foreclosure even with Congressional authority would have the tiny [sarcasm] problem of violating the Separation of Powers doctrine

    George Bush has experience with this, maybe he could be made a Czar for Constitution Busting, or somesuch.

  76. 76
    Ailuridae says:

    @Francis:

    IAAL also. No, there’s no authority whatsoever for the President to impose a national moratorium on foreclosures. The closest thing I can think of is Truman’s attempt to seize steel mills. That didn’t work.

    Unless you are Bob Reich and then you think it worked out just fine and was a clear precedent for decisive action in BP Oil Crisis.

    No, really, he wrote that. And he was fucking secretary of labor.

  77. 77
    eemom says:

    @General Stuck:

    is there a grain of truth that sometimes (a lot) people on the left go after Obama reflexively?

    You know what the irony of it all is? If the swarm of trolls attacking John on every thread were for some reason to return home to FDL and start attacking Lady Jane for being “reflexively” against Obama, their asses would be banned before you could say “public option.” AFTER she got done calling them corporatist shills.

    So who’s the more “liberal”? A McCarthyesque demagogue who censors dissent, or a guy who freely lets people say whatever shit they want to about him on his own blog?

  78. 78
    Martin says:

    I think the WH has the right take on this, provided that two things come of it:

    1) The DOJ opens an investigation into all of these companies.
    2) Congress takes up legislation to tackle the consumer side of the problem (this would be Warren’s area) and the investor side (not sure what FinReg proposes to do in this area).

    This should largely be spearheaded by the states, since property law is their bailiwick, but this isn’t a problem of local banks fucking their customers and investors – it’s a problem of national and multinational banks fucking their customers and investors. This is a national problem.

    But I agree that there shouldn’t be a full moratorium for cases that are going through the courts and the courts determine that documentation is in order. I don’t think foreclosures should be able to proceed without going through a court, however. I think that standard should be added to those states that bypass the courts.

    What I don’t understand is how 50 states that are responsible for setting and enforcing title transfer could have ALL fucked it up. That seems to suggest that the states aren’t competent or capable of addressing it any longer.

  79. 79
    General Stuck says:

    @LT:

    Yes. And?

    Well, since you admit, in this case, the chicken came first, a little reflexive egg breaking would not be unexpected, doncha thinks? I mean all is fair in politics and war.

    Though personally, kicking the left has become more a sport with me, no different than kicking the right. Same kettle, Red Fish – Blue fish . All of them opposition.

  80. 80

    @dday:

    I was hypothetically playing out the implications of an industry-wide penalty under Cordray’s lawsuit, which I find perfectly acceptable.

    Isn’t that McArdle’s excuse you’re copping there, dday?

    “It wasn’t a statistic, it was a hypothetical”

  81. 81
    Bob Loblaw says:

    http://4closurefraud.org/2010/…..bo-signer/

    This should be the subject of a post, just for the fun of it. Obama’s Chicago mortgage and suspected notary fraud on the part of Chase financial. This country…

  82. 82
    joe from Lowell says:

    @Ailuridae:

    Unless you are Bob Reich and then you think it worked out just fine and was a clear precedent for decisive action in BP Oil Crisis.
    No, really, he wrote that.

    I don’t see anything about Truman seizing the steel mills in your link. Am I missing it?

  83. 83
    AhabTRuler says:

    @arguingwithsignposts: Isn’t that a false dichotomy? That we must accept all hypothetical constructions or none?

  84. 84
    General Stuck says:

    @Bob Loblaw: So now you are linking blank pages. What next, Tarot Cards and potions for making arguments?

  85. 85
    Face says:

    Any stoppage of foreclosures just lets the Young Bucks Buying T-bones have more scratch for dope and crack.

  86. 86
    joe from Lowell says:

    @Bob Loblaw: linky no worky

  87. 87
    Janus Daniels says:

    This comes from a blog so obscure that it has no comments yet, despite the BalloonJuice bump.
    It’s only heading is “Comics I Have Read”
    Seriously.
    I guess that taking hits from such a lord of the liberal meritocracy must have hurt.
    Either that, or you noticed him trolling for attention, and decided to give a pity link.

  88. 88
    Bob Loblaw says:

    @General Stuck:

    http://4closurefraud.org/2010/.....bo-signer/

    Hyperlinking bullshit, though you could just not act like a child and say “dead link” or something instead of trying to make this personal as well. Because that was rather sad on your part.

    If it falls through again, just google obama, robosigning and 4closurefraud.org. Top link, though there technically two parts, the second one isn’t of much interest.

  89. 89

    @AhabTRuler:

    That we must accept all hypothetical constructions or none?

    No, but as I mentioned in my first comment, there are reasonable hypotheticals and there are hypotheticals which are arguably in the realm of Beckian Armageddon speak.

    I would argue that dday’s hypothetical skews toward the latter more than the former, given that a) it’s a suit against one mortgage company, and b) there’s as yet no proof that the process in all of these foreclosures was the same as the one alleged in the GMAC suit.

  90. 90
    Quaker in a Basement says:

    I, for one, think Obama should order the clouds to rain a gentle drizzle of refreshing pink lemonade. John Cole, on the other hand, is obviously in the pocket of MinuteMaid.

  91. 91
    Bob Loblaw says:

    Link works now. Oh, Marshe Craine, you just might be famous one of these days…

  92. 92

    @Quaker in a Basement:

    John Cole, on the other hand, is obviously in the pocket of MinuteMaid Big Lemonade

    FTFY

  93. 93
    Ailuridae says:

    @joe from Lowell:

    Well, that’s just a historical fact that BoB Reich former secretary of labor was completely unaware of when he suggested Obama could take BP into receivership.

    Here’s the wiki link on the case

    So there was two points to my earlier snark. One is that Reich was suggesting something that a more reasonable Supreme Court had already slapped the fuck down as unconstitutional and that action by Truman was also more justified and more limited in scope.

    The second was that a former Secretary of Labor for a Democratic administration was’t readily familiar with Youngstown Steel as a decision. It would almost be like him looking off into the distance when you brought up PATCO.

  94. 94
    General Stuck says:

    @Bob Loblaw: But it wasn’t a dead link. It was a link to a removed page. And it is the height of absurdity for you to accuse anyone here of making things personal. And what is the point of link? that Obama had his mortgage robosigned, or whatever. The post reads a lot like your nonsense here, or it makes little or no sense, and seems to be written in tongues, in barely readable gray print.

  95. 95
    Belafon (formerly anonevent) says:

    @Bob Loblaw: Bob, your link’s broke.

  96. 96
    joe from Lowell says:

    Actually, I think Bob’s link is pretty awesome, if it’s real.

    Heads need to roll over this document fraud. Who knows what other nasties will craw out when this rotting stump gets kicked over.

    The Florida real estate market is snake pit from top to bottom.

  97. 97
    Punchy says:

    Related to this mess, cribbed from Atrios:

    NEW YORK (AP) — In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.
    ……….
    In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

    Thats some fucked up shit.

  98. 98
    Bob Loblaw says:

    @General Stuck:

    1. You’ve clearly never heard of MERS or have any idea what any of this mortgage paperwork business is about, or you’d have paid very close attention to Ms. Craine’s mysteriously mutating signature. And laughed.

    2. Post #86. Because joe from Lowell is an adult, and that’s how adults tend to handle down links, while you’re just a sad little child who has nothing else going for him but a website where you post under the pseudonym ‘General Stuck.’

  99. 99
    joe from Lowell says:

    Uh…way not to make it personal, Bobb-o.

    Anyway, nice link.

  100. 100
    Bob Loblaw says:

    @Belafon (formerly anonevent):

    It’s fixed in #88. I’d delete the offending post if I could, but the window is past. Trust me, you’re going to want to read it.

    Actually, I think Bob’s link is pretty awesome, if it’s real.

    Those signatures and paperwork are matters of public record, joe. I’m pretty sure this is legit.

  101. 101
    General Stuck says:

    @joe from Lowell:

    Maybe Marsha Crain is related to Denny, and has multiple personalities that makes for different signatures. But I think I see loblaws point, at least.

  102. 102
    burnspbesq says:

    @Joe Beese:

    Since you’re a known dumfuck, I will try to explain this as simply as possible.

    There is no Federal law currently on the books that grants anyone in the Federal government the power to do what you and Sears want it to do.

    It is not at all clear that such a law would be Constitutional.

    Got it?

  103. 103
    burnspbesq says:

    @Cacti:

    “I’m becoming increasingly convinced that a large segment of the American population thinks the President is, in fact, a Monarch and can just make it up as he goes along”

    The Republicans have been telling them that for decades. Why wouldn’t they think it?

  104. 104
    General Stuck says:

    @Bob Loblaw:

    By Gawd loblaw, you’ve discovered there is a fraud problem in the mortgage industry. Somebody get this man a medal for his brilliance. So again, what is your point, other than MERS is rotten? I hope Cole makes it a thread post, so we can discover what you are so excited about, to prompt a cut and paste comment on multiple threads.

    And fuck you, for general reasons.

    edit – well it looks like there is one person here who understands you loblaw. J from lowell now can translate for the rest of us.

  105. 105
    Steve says:

    @burnspbesq: If we’re talking about a law passed by Congress, as opposed to unilateral action by the President, what do you see as the Constitutional problem?

  106. 106
    Ailuridae says:

    @Steve:

    Property rights have almost always been the domain of state and local governments. That doesn’t strike me a a tenther position at all actually.

  107. 107
    burnspbesq says:

    @Steve:

    I would be concerned about the impairment of contract clause, but that’s just an off the top of my head concern.

    If I were arguing against the constitutionality of the statute, I would also argue commerce clause, and give the supremes a chance to rethink Raich, which I think is a steaming turd of a decision.

  108. 108
    burnspbesq says:

    @burnspbesq:

    I also think Ailuridae’s Tenth Amendment argument deserves to be taken very seriously.

  109. 109
    Steve says:

    @Ailuridae: Where you’re talking about a nationwide and systemic problem, as opposed to the federal government intervening in a specific case, I don’t think it would be hard to find an interstate commerce nexus. After all, real estate doesn’t travel, but these mortgages and securitizations sure did.

    Heck, even if you passed legislation that was limited to federally-backed mortgages, that would be a pretty huge percentage of mortgages.

    @burnspbesq: The federal government can impair the obligation of contracts all it likes, though. The Contracts Clause only applies to the states.

  110. 110

    @gene108:

    Sigh, I wish some liberals would just cock up and form a communist party. They hate the idea of profits, they think the Soviet Union, China, Cuba, North Korea, etc. failed because they just didn’t implement communism properly, and generally jump to attack businesses as a knee-jerk reaction to everything that happens.

    Oh, you mean how like Republicans and Libertarians keep telling us that we’ve never had real, true, free-market capitalism™ and that all of their previous experiments with completely unregulated markets don’t count so we should just clap harder and get it right this time. Oh, and talk about knee-jerk reactions, any time anyone criticizes any business in America there’s a shill like you who’s willing to call them a communist.

    Personally I wish that some conservatives would cock up and form a fascist party full of witches, Nazis and morons. Oh wait, you already have, as witness Christine O’Donnell, Rich Iott and Sarah Palin.

    There are plenty of people defaulting on their mortgages. Those people should be forced into foreclosure. They bought something on credit, put that something up as collateral basically, and the creditor has a right to seize the collateral, if you stop making payments on your debt. That’s how our society works. That’s the law.

    The law also says that you have to have clear title to the property before you issue a mortgage against it and defines how that should be documented. The issue here is that the banksters didn’t want to pay attention to those laws because it interfered with them making lots of money. If you weren’t libertarded you’d understand what’s at issue here, banksters sold securities based upon mortgages granted against property that the mortgage holders may or may not have owned. That’s called fraud.

    If I offer to sell you title to a certain famous bridge in Brooklyn it’s up to me to prove that I actually own the bridge in question. If I am loaning you money to purchase a bridge in Brooklyn, and the security on the loan is the bridge in question I need to know that if you default on the loan that I have the right to seize the property in question. If you are saving money in my bank, it’s up to me, to make sure that the people I loan that money to can pay it back and that if they default that the assets I loaned the money against exist, will cover the loan and are actually owned by the person who took out the loan. I think you’d be pissed off if a sheriff showed up at your house one morning to evict you based upon a notice of foreclosure based upon a loan against your property that was taken out by some grifter who claimed that they were the real owner of the property based upon some shoddy documents they ginned up.

    For every hard luck case that’s out there of someone getting laid off and unable to find work and unable to make their house payments, there are probably as many cases of guys who are just strategically defaulting on their mortgages because it makes the most economic sense for them to stop paying the mortgage than it is to pay a mortgage that’s underwater.

    And what’s wrong with this? Businesses walk away from obligations all the time, and not because they can’t afford to fulfill them but because they don’ t want to fulfill them because it’s not in their financial interest to do so. Or they go running to the government to bail them out. The banksters made bad loans to people who shouldn’t have gotten mortgages. Am I pissed at those people? Yes, I sure am, but I’m more pissed at the banksters, who threw concepts like due diligence out the window, ask any stockholder of Washington Mutual if you don’ t believe me. Banksters committed massive fraud, in granting mortgages against properties that didn’t have clear titles and were willfully negligent in loaning money to people who had no prospect of paying it back. They did this because they were being paid based upon how many mortgages they granted, and not on whether or not those mortgages were any good. Then they took these mortgages, sliced and diced them and sold them as AAA rated securities, introducing another element of fraud, this on the part of the ratings agencies such as Moody’s and S&P, who so far have gotten off lightly in this mess.

    Hell, I know people who walked away from properties they planned to flip, because they bought it right as the housing bubble busted and didn’t want to pay the bank the difference on the a short-sale.

    And what’s wrong with that? They made an investment, it didn’t turn out, they acted no less rationally than any business would in this situation. And what right does the bank have to complain? The terms of a mortgage are that if you don’t pay the mortgage on the property the mortgage holder gets the property. You can say that these people were stupid and greedy, but how are they any dumber or any greedier than the banksters who granted them loans, made millions in commissions, securitized those loans and sold them off and who never considered the overall state of the housing market.

    Not every guy who is in foreclosure’s a fucking tough-luck case and the banks are probably going to do more for the neighborhood, by maintaining the foreclosed property so they can resell it than the owner who strategically defaulted on the mortgage.

    Except the banks don’t want to do this. The banks are trying to keep these loans on the books as performing loans rather than foreclose on the properties involved and take the huge write downs that this will entail because that means that their balance sheets will be covered in red ink for years to come. This is another form of fraud because if the banks were honest about all of the toxic crap fouling their balance sheets they’d be worth less money, which means lower stock prices and fewer investors. If you and I each agree to loan each other one trillion dollars we don’t get to then claim that we now each have assets of one trillion dollars because neither one of us could ever pay off the note. Yet that’s the sort of thing these banks are doing, claiming valuations based upon the book value of these loans and not upon their real value, which is minimal because the people who took out the loans aren’t making the payments and the assets the loan was made against, if sold, would not recoup the cost of the loan.

    The banks are holding off on foreclosing on properties for as long as they can because once they do they have to admit that these loans were non-performing and write them down. Sure, they get to seize the property, but it’s not worth what they paid for it, and they have to maintain it until it sells and the supply of people who are willing to buy it, which in this economy was small to begin with, is shrinking because title insurers aren’t willing to insure them and other banks aren’t willing to loan money against them because you’d have to be a complete moron, or a greedy criminal, or both, to loan someone money to buy a piece of property from someone who couldn’t clearly demonstrate that they had the right to sell it.

    The banksters also aren’t maintaining these properties but instead letting them decay and contribute to the further decline of the neighborhoods in which they’re located. In doing so they’re behaving no differently than any home-owner who is walking away from an underwater mortgage even though he could still pay it. The banks could maintain these properties, or sell them, but it’s not in their interest to do so because they would then either have to pay out the money to maintain them or lose valuation by being forced to sell them, take their losses and adjust their books accordingly. Yet strangely enough we’re not seeing any indignant editorials about these banks walking away from their obligation to maintain this property.

    Now, going back to the subject of the foreclosure moratorium, which you don’t understand, when you buy a piece of property you buy title insurance. Title insurance protects you, the buyer, from finding out that the person who owned the property really didn’t own it or have the right to sell it to you. There’s a whole web of laws that deal with this sort of thing but what it boils down to is to the fact that as a bankster you are required to make sure that the people you grant mortgages to have the ability to pay them back and have the legal right to purchase the property that you’re mortgaging. The banksters failed miserably at the first, handing out all sorts of stupid and toxic loans with the belief that property values would rise and that buyers would be able to refinance out from under them (which meant more commissions for the banksters when all of those ARMS were refinanced) and as it turns out they’ve failed miserably at the second. But they sure did make a lot of money. Man I need to get a job like that.

  111. 111

    @burnspbesq or @Steve:
    Just out of curiosity, since IANAL, is the 10th amendment ever taken seriously by the Supreme Court?

  112. 112
    Steve says:

    @arguingwithsignposts: The President of our chapter of the Federalist Society was in my Con Law class. He constantly complained about how the Supreme Court totally ignores the Ninth and Tenth Amendments, the “twin pillars of federalism.” After about the hundredth complaint, the professor replied, in a mocking tone, “Awww, poor little Ninth and Tenth Amendments, getting smaller and smaller!”

    It was pretty funny at the time. Now that Bush made my classmate a federal appellate judge, it’s not quite as funny.

  113. 113
    Ailuridae says:

    @Steve:

    Sorry, that was some serious snark and inside jokiness on my part.

  114. 114
    El Cid says:

    @Wile E. Quixote: There was a time when libertarians argued that the only worthy role of government authority over individuals and corporations was the protection against physical violence and the guarding of property, including its legal manifestations. You know, like, proving you own something.

  115. 115
    Martin says:

    @Bob Loblaw: Interesting.

    I get suspicious when one website seems to keep coming up with information like this without finding similar information elsewhere. I’ll credit someone with one round of good luck/hard work, but time and time again?

    Extraordinary claims and extraordinary evidence and all that. But if these are accurate, that’s quite a damning case against Chase. You’d think they’d make sure not to fuck up documentation of govt officials. That’d assume they’re not idiots, which, I suppose is false by definition.

  116. 116
    dday says:

    @John Cole: Ask yourself what JPM, GMAC and BofA are doing right now. They’ve already imposed said moratorium. The cover story is they’re fixing “technical paperwork errors.” In reality they have to be pretty panicked. BofA made a deal yesterday with a top title insurer to basically eat any losses they incur on houses without clear title. Others are probably trying to do the same. The investors are breathing down their necks to take back the securitized loans, too. The rating agencies are threatening downgrades. This is a cover-up to a bigger cover-up of shitty loan origination and securitization, and no amount of pretending it doesn’t exist will stop the bleeding. So acting like everything hinges on what Obama does about a moratorium is silly. It’s more like what he should do about the aftermath, because a moratorium is already in place for about 25% of the market and it’s a matter of time on the other 75%.

    And in my view, Obama should work expeditiously to stop foreclosures from happening, through legitimate loan modifications that reduce principal. With the heat on the servicers, this has the potential to look attractive to them. They could reduce the principal commensurate with the market and then offer servicers half the upside on any appreciation. They could institute right to rent. They could take another shot at cramdown (a longshot). In short, they could find a solution to accomplish what they said they would do in January 2009 – fix the housing market. Now that we know there’s systemic fraud at its heart, it’s even more imperative to do so. We won’t get an economic recovery without fixing this.

    @Francis: F&F physically own $5 trillion in mortgages. Surely the government has a credible claim to do something on those?

    @arguingwithsignposts: There’s actually plenty of proof that the entire mortgage industry was using robo-signers and fraudulent affadavits. Jeffrey Stephan, the named defendant in the Ohio lawsuit against GMAC, admitted that he also robo-signed for JPMorganChase. BofA suspended foreclosures because they were caught with the same robo-signing policies. A Wells employee admitted in a deposition to signing affidavits after looking at them for 30 seconds. That’s close to 80% of the market right there. The Ohio Attorney General told me personally that there’s reason to believe this was a systemic, industry-wide process. Look at what Punchy just dropped in #97. This is hardly an out-of-left-field claim.

  117. 117
    Martin says:

    @Steve: Yeah, I don’t see the problem with the feds intervening in a pretty broad (though not universal) category of cases. There are two sides to this fraud – consumer and investor. The investor side is clearly in federal jurisdiction. The consumer side much less so, but if the two sides are suffering from the same problem, and suffering it nationally, I don’t see how that would prevent the feds from intervening. It’s no longer a state issue if banks are perpetrating a common fraud across 50 states.

  118. 118

    You’re hurting every single buyer and seller in the market.

    How? Don’t things either help the buyer and hurt the seller or vice versa? The housing stock for sale is large enough, I think near historical highs, in fact. So there’s a liquid market. I don’t think it’s possible for one thing to hurt every single buyer and seller in the market.

  119. 119
    Mark S. says:

    @arguingwithsignposts:

    According to wikipedia, not often:

    The Supreme Court rarely declares laws unconstitutional for violating the Tenth Amendment. In the modern era, the Court has only done so where the federal government compels the states to enforce federal statutes.

  120. 120
    Omnes Omnibus says:

    @Norwegian Shooter: If there is a moratorium, banks will stop issuing mortgages. that hurts both buyers and sellers in this way: If you are selling your house and I want to buy it but I can’t get a mortgage, i can’t buy it. This means you can’t sell it and move to the new town for the job you were just offered. Everyone suffers.

  121. 121
    joe from Lowell says:

    @General Stuck:

    So again, what is your point, other than MERS is rotten?

    I don’t think that link needs a point. I think it’s just awesome on principle.

    They faked the signatures and stamps on BARACK FREAKING OBAMA’S mortgage docs.

    Ha ha.

  122. 122
    General Stuck says:

    @Omnes Omnibus:

    If there is a moratorium, banks will stop issuing mortgages. that hurts both buyers and sellers in this way: If you are selling your house and I want to buy it but I can’t get a mortgage, i can’t buy it. This means you can’t sell it and move to the new town for the job you were just offered. Everyone suffers.

    It is amazing to me that this even has to be explained, let alone time and again. It is like standing over a hot stove and debating the degree of burns it could cause.

  123. 123
    General Stuck says:

    @joe from Lowell:

    the point is, loblaw needs dosage of his own medicine, and let the blog gawds sort it out. i just work here.

  124. 124

    @John Cole:

    Any idea what they would do after a hypothetical moratorium was imposed? Who would be left to sort it all out? How long would it last or need to last? Wouldn’t this just blow the battered real estate market into all hell? Or is the systemic risk a greater threat?

    1. They (meaning the admin, right?) wouldn’t do anything directly to contested foreclosures.
    2. The courts and the parties would have to sort it out. Yes, that will take a long time to completely work through, but every month a family gets to stay in their home is a good thing.
    3. They wouldn’t set a time limit, but wouldn’t allow a foreclosure to close until a court ruled it kosher.
    4. No. I have no idea what your reasoning is here. The housing market will stabilize, since new foreclosures wouldn’t be coming onto the market at below current market rates. Listen to today’s Democracy Now! show, in particular the end of this segment:

    You know, we talk a lot about this moratorium, and frankly, I find the controversy over the issue of a moratorium a bit perplexing. Let’s talk about the practical consequences. Nothing would happen if we had a moratorium on foreclosures, practically, right now, because the banks can’t sell the properties that they already have title to. So, frankly, one of the problems that I have is that regulators and legislators are a bit late to the game. One of the things I find most disturbing is that it was not legislators or regulators that shut this down; it’s been the industry itself. When they realized what problems they have caused themselves by the faulty paperwork, by all the problems, they’re the ones that have said, “Wait a minute. We’ve got greater liabilities ahead, because of all that we’ve done wrong.” And so, that’s why this is slowing down.

    But again, let’s talk about the very real consequences here. And Bruce Marks, I totally agree a hundred percent. One of the questions that we all miss when we’re talking about this is, what’s the point of foreclosure? If we granted every single foreclosure that’s pending right now across this country, what would happen to those homes? We can’t get people qualified to get in homes as it is. So, really, we need to focus on the practical consequences of a moratorium, which would only be to stabilize the market. What we need to be doing is working, like Bruce is doing, to keep people in homes, because the fact of the matter is, that’s far better for these lenders in the long run than tossing people out into the streets.

    5. Systemic risk of what?

  125. 125

    @Norwegian Shooter:
    What Omnes says. Also, think about if every mortgage written in the 2000s (at least) was suddenly called into question on the Title. Who would buy anything?

    (personally glad I was able to get out of a house in 2007 and am now renting)

    ETA: Because (and this is slippery slope talk, so fwiw) it’s not just the homes that are in foreclosure that were subject to the signing processes that are in question here. I hope I’m making sense in following dday’s apocalyptic hypothetical to an even more extreme hypothetical.

  126. 126
    hilzoy says:

    @arguingwithsignposts: “Apparently, he is considered the progressive equivalent of David Broder or something.”

    In my dreams David Broder is replaced by a centrist equivalent of John Cole. The amount of sense written on the WaPo editorial pages would skyrocket, just like that.

    Maybe then Richard Cohen could be replaced by, well, anyone

    Nah; too much to ask.

  127. 127

    @Omnes Omnibus: Find me one media report that says if foreclosures stop, so will mortgages. Or try to answer it yourself: why will mortgage issuing stop? Btw, I understand everything past your first sentence.

  128. 128
    Mnemosyne says:

    @Martin:

    But if these are accurate, that’s quite a damning case against Chase. You’d think they’d make sure not to fuck up documentation of govt officials.

    Weirdly, that reminds me of the Jeffrey Toobin book about the OJ Simpson case, where he ended up concluding that Simpson was guilty as hell, but the LAPD and DA’s office had gotten into a lazy spiral where they relied on confessions and didn’t pay much attention to taking care of the physical evidence, so when they actually had a huge case that depended on the physical evidence, they fucked it up.

    That would be my guess here: Chase was so used to doing their lazy, borderline illegal (at best) procedure that they were institutionally unable to dot the I’s and cross the T’s even when they had a big client.

  129. 129
    joe from Lowell says:

    @General Stuck:

    the point is, loblaw needs dosage of his own medicine, and let the blog gawds sort it out.

    I’ll stipulate that I was pleasantly surprised when I clicked the link.

  130. 130

    @arguingwithsignposts: The title issue is a good one. But it is unrelated to a federal foreclosure moratorium. The titles are cloudy already. That’s why banks are issuing their own moratoriums.

  131. 131
    Omnes Omnibus says:

    @Norwegian Shooter: Why would a bank loan, let’s say, $200,000 to someone if they can’t get collateral?

  132. 132

    @Omnes Omnibus: They wouldn’t. But WTF does that have to do with a foreclosure moratorium?

  133. 133
    Mnemosyne says:

    @Norwegian Shooter:

    Or try to answer it yourself: why will mortgage issuing stop?

    Because if foreclosures stop and all of those mortgages are thrown into doubt, title insurers will stop insuring mortgages, because they don’t want to be left on the hook when/if a court finds that there wasn’t a clear title after all.

    Put it this way: what happens if it turns out that even a small percentage of these bad mortgages are on houses that it turns out the bank writing the mortgage didn’t have a clear title to in the first place? Given how much churn was going on, it’s not an unlikely scenario.

    ETA: Maybe this is because it was my family’s business for years, but I really don’t think you have any idea of what title insurance is and how title insurers getting scared could completely bollix up the market if they decide insuring title on future mortgages is too risky.

  134. 134
    Omnes Omnibus says:

    @Norwegian Shooter: The foreclosure process is the way a lender grabs its collateral when an owner defaults. (It apparently also is the process by which banks just grab houses.) If the banks can’t get their collateral in the case of a default, they won’t loan the money.

  135. 135

    @El Cid:

    There was a time when libertarians argued that the only worthy role of government authority over individuals and corporations was the protection against physical violence and the guarding of property, including its legal manifestations. You know, like, proving you own something.

    Ah yes, the thrilling days of yesteryear where Libertarians believed that the sole function of the state was to protect other individuals against the initiation of force or fraud. But of course you don’t need a state to do that sort of thing because the free market will take care of it.

  136. 136

    @Mnemosyne: The titles are already cloudy because of the current foreclosure process. Only improperly foreclosed properties have bad titles. If foreclosures stop, title remains in the previous owner’s hand and it won’t become cloudy. Is this so hard?

  137. 137

    @Omnes Omnibus: All they have to do to get their collateral is to properly foreclose. Why are you studiously avoiding the central issue of improper foreclosing procedures? That’s the problem.

  138. 138
    General Stuck says:

    @joe from Lowell:

    I’ll stipulate that I was pleasantly surprised when I clicked the link.

    Good for you. I don’t care.

  139. 139
    Omnes Omnibus says:

    @Norwegian Shooter: If there is a moratorium on foreclosures, then they can’t properly or improperly foreclose.

  140. 140

    @Norwegian Shooter:

    All they have to do to get their collateral is to properly foreclose.

    But what if the ownership of the Title is already clouded by previous shenanigans (cue Pandora’s Box). A proper foreclosure would only alleviate one level of clouds.

    Or am I totally reading this wrong?

  141. 141

    Okay, let’s take a step back. The banks themselves are currently slowing down foreclosures because there are serious problems with their processes. They messed up and they have to fix the problem or else they will have bigger problems down the road. Can you say class action lawsuit with literally tons of evidence?

    The first thing they are doing is correcting the problem. So when a new property is in default, they will be able to legally foreclose. Any new mortgage written today has zero chance of defaulting and entering foreclosure before they fix their systems. Yes, it will take a while, but they won’t proceed until they have it right. It is not in their interest.

  142. 142
    Omnes Omnibus says:

    @Norwegian Shooter: Based on your scenario, why is a moratorium necessary?

  143. 143
    Mnemosyne says:

    @Norwegian Shooter:

    Only improperly foreclosed properties have bad titles.

    Oh, sweetie. I’m sorry, I just don’t have your simple faith that somehow only improperly foreclosed properties have bad titles. Those are the bad titles that we know about, and we only know about them because of the foreclosure proceedings. Pretty soon, the title insurance companies are going to start wondering about the rest of the titles in that bundle that Chase sent over once it turns out that all of the foreclosed properties have bad titles, too.

    If foreclosures stop, title remains in the previous owner’s hand and it won’t become cloudy. Is this so hard?

    Assuming the previous owner’s title was clear and wasn’t rushed through the way a lot of these foreclosures that went bad have been. A cloudy title doesn’t magically become uncloudy just because you’re holding it in your hand. That just makes it a title that you don’t know is cloudy.

  144. 144

    @arguingwithsignposts: You’re right but missing the point. If a title is already cloudy – it was improperly foreclosed – slowing down or stopping another foreclosure doesn’t help or hurt the title. It’s already f-cked. The issue at hand is to stop messing up previously clear titles.

  145. 145

    @Norwegian Shooter:

    If a title is already cloudy – it was improperly foreclosed – slowing down or stopping another foreclosure doesn’t help or hurt the title.

    See Mnemosyne’s response above, which gets at what I’m trying to say much better than I was saying it.

  146. 146
    Mnemosyne says:

    @Norwegian Shooter:

    I think you’re missing our point — cloudy titles aren’t generated solely by foreclosures. I suspect the entire process is so effed up from top to bottom that, again, the cloudy titles that we know about are the ones from these improperly foreclosed mortgages, but there are a bunch more floating around out there waiting to explode.

  147. 147

    @Mnemosyne: Don’t call me sweetie.
    @Omnes Omnibus: A moratorium is good because it stops current foreclosures from creating new clouded titles. Oh, and it keeps people in their homes. That’s good, right?

  148. 148
    Omnes Omnibus says:

    @Norwegian Shooter: Nope, clouds on a title tend to appear only when a transfer is about to take place. During a foreclosure or during a sale. Fucked up paperwork is not just a feature of the loans that went bad.

  149. 149

    @arguingwithsignposts: If Mnemosyne is saying it much better than you were – I’m trying to remain nice here.

    @Mnemosyne: What’s done is done! We’re talking about slowing down mortgages currently in foreclosure!

  150. 150
    LiberalTarian says:

    Yup, really weird. But, you need to stop paying attention to her. She’ll go away.

  151. 151
    Omnes Omnibus says:

    @Norwegian Shooter:

    Don’t call me sweetie.

    That so makes me want to say, “Yes, dear,” but I won’t.

  152. 152

    @Omnes Omnibus: You three are hopeless. I’m going to watch the Daily Show. Good night!

  153. 153
    Omnes Omnibus says:

    @Norwegian Shooter: I, personally, am sorry to be such a disappointment to you.

  154. 154

    @Norwegian Shooter:

    What’s done is done! We’re talking about slowing down mortgages currently in foreclosure!

    Oh, if only life were so simple.

  155. 155
    Mnemosyne says:

    @Norwegian Shooter:

    What’s done is done! We’re talking about slowing down mortgages currently in foreclosure!

    So you want to put a band-aid on the sucking chest wound? The mortgage market is fucked up way, way beyond just foreclosures. Foreclosures are the canary in the coal mine that’s letting us know just how many “good” (ie paid) mortgages have some serious legal questions.

    I don’t think anyone’s arguing that the current moratorium should end, and it should probably be extended to the other 10 states that don’t have one right now. My argument is that “fixing” foreclosures isn’t going to do a whole lot to prevent problems down the road because even “clear” titles are probably pretty effed up.

  156. 156
    Ron says:

    @gene108: Even for the “tough luck” cases, what exactly are we supposed to do? It sucks, but people who can’t afford to keep their homes don’t get to keep their homes. The main issue of legitimate concern right now is foreclosures on properties by banks that don’t actually have the right to foreclose.

  157. 157

    […] I got written up on Balloon Juice by Often-Wrong himself, which is a privilege. Specifically, he was responding to my admittedly intemperate post responding […]

  158. 158
    Sly says:

    The last time a national foreclosure moratorium was attempted was in 1934, with the Frazier–Lemke Farm Bankruptcy Act. It gave bankrupt farmers a five year period during which they could make rental payments to their creditors and after which they could buy back the farm over a six year period at 1% interest.

    It was declared unconstitutional within a year. Only after the legislation was modified to allow creditors to force a public sale of the farm did it pass muster under the Fifth Amendment.

    So if the proponents of a “national moratorium” are arguing for a policy that would only affect those who declare bankruptcy, who are willing to pay rent to Wells Fargo on a home they ostensibly own, and who would still be vulnerable to having their house sold out from underneath them unless they can match the best offer at a public auction, then I can see that policy being legal. So long as its passed by Congress first.

  159. 159
    burnspbesq says:

    @Steve:

    Hey Rocky, watch me pull a rabbit out of my Due Process Clause. The same mechanism that makes Equal Protection apply at the federal level. A security interest is probably “property” for both Due Process and takings analysis.

  160. 160
    Steve says:

    @burnspbesq: Yeah, a vested interest would be a taking. I don’t know that a moratorium or a new set of procedural requirements would be a problem, though. A law that cancels or modifies a bunch of mortgages would be a taking, though, I think.

  161. 161

    @wmd: Actually, Marcy Wheeler (who by the way is trying to sell a house and buy another house, so it’s not as if it’s in her financial interests to see another catastrophe hit the housing market) has tried to answer John’s questions on this. Her take is that catastrophe may well be inevitable. Here’s a sample:

    John frames this as an issue of stopping bad foreclosures. But that’s not the problem, not by half. The problem is that the problems exposed by foreclosures in judicial states are problems that exist throughout mortgages that were securitized in the last 6-10 years. The reason the servicers are going to such lengths to make up for deficient paperwork–including robo-signing affidavits or counterfeiting notes–is presumably because for at least a significant portion of mortgages that were securitized, the paperwork is not in order. What we’re seeing through the foreclosure process is just what is getting exposed through the random sampling of foreclosure, and any other random sampling of securitized mortgages would presumably have the same level of deficient paperwork.

    Marcy then cites the CNBC piece “Foreclosure Fraud: It’s Worse Than You Think”, an article that does not make for pleasant reading.

    Between DDay and Marcy, it looks like the idea that this is not really a big deal and that this is all being made up by icky hippie unpersons is getting a touch harder to defend. In any event, the SEIU service http://wheresmynote.com/ is a good resource if you’re curious about who actually owns your mortgage note. (Unless, of course, you’re like some of the commenters at Zero Hedge and think that anything a union does — just like anything FDL does — is automatically evil.)

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