Bank of America is the latest mega-mortgage lender to put their housing foreclosures on pause due to difficulty filling out forms, the New York Times reports. BoA joins GMAC Mortgage and JPMorgan Chase in the “This is A Lot of Work!” camp, temporarily halting all evictions to amend the paperwork in piles of cases. In short, “tens of thousands of foreclosure cases would be in limbo for months or, if the consumers in default hire lawyers, years.”
The cases span 23 states and have even become a political issue, with at least two attorneys general, in Connecticut and California, running for governor and thus, temporarily speaking For the People.
Mr. [Richard] Blumenthal, who is running for senator in Connecticut, said the freeze “should stop a foreclosure steamroller based on defective documents and enable effective remedies.”
What happened? Basically, the banks had so many foreclosures to go through that it was left up to “midlevel bank executives to “sign thousands of affidavits a month attesting that they had personal knowledge that the facts of the case were as presented.” It’s called “robo-signing.” But when you get to court, that’s no good:
When defense lawyers started deposing these robo-signers, they acknowledged that they could not possibly have knowledge of all the cases.
Everyone likes watching the banks screw up, right? This time it means some people can stay in the homes, for now, that the banks helped them lose in the first place.
Thomas Lawler, an economist who specializes in housing, gets the finest critique and an award for Awesomely Put: “I mean, jeepers, look at the unemployment rate; how hard would it have been to hire more folks?” Jeepers, indeed.
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