This is a snippet from Neil Garfield’s Living Lies blog. Neil has a wealth of good information on his blog, check it out. This is his commentary on a recent NY Times article entitled “Why Creditors Should Suffer Too.”
This article is on the right track. Using the guidelines of resolution trust, a fair and equitable distribution of risk and loss could be achieved while at the same time demonstrating to the world that the United States accepts the responsibility for what our “masters of the universe” on Wall Street and Main Street did to world commerce, government operating funds, pension funds and the rest. My faith in the Federal government coming up with a real solution to the financial crisis is diminishing daily. They talk to the talk about helping homeowners and states and the game still goes on. Impostors are stepping in to grab trillions in assets that don’t belong to them through the process of foreclosures. These proceedings are fraudulent in most cases, from one end to the other and dismissive of the offsets borrowers are entitled to for predatory lending, inflated appraisals and a complete abrogation of the underwriting duties.
The ultimate risk here is going to fall on the citizens of every state whether they have a mortgage or not. The inconvenient truth here is that title is becoming increasing cloudy on virtually all property in every state as these foreclosures proceed. There is a solution. It has been done many times and it is time to do it again — without concern to the repercussions on Wall Street. Since the Federal government seems to preoccupied with Wall Street Banks, leave that problem to them.
States need to look after their own affairs and one of those is property law and title to real property. A fair redistribution through agency authority under enabling legislation would give everyone a chance to prove up their title claims, and provide each state with the revenue they were cheated out of when this scheme of “off-record” assignments and hidden profits and fees were not reported because the entities were not even registered much less regulated by each state. Counties, cities and state treasuries could and should be filled back up as local banks take up the vacuum left behind by the monster mash left by Wall Street. Local banks (perhaps with state guarantee) could by state mandate be empowered to participate in the new loans under clear title providing the state with the revenue they lost and the homeowner with a fair transaction restoring some of the equity they thought they were getting but which was diverted to unknown players receiving undisclosed fees.
And certain states that have a potentially good tax base, along with underlying land or mineral assets could issue proprietary currency to avoid the repercussions of the wholesale printing of money going on in Washington. We’ve seen the result of that too. My opinion is that this is ONLY going to get solved at the state level. We can strengthen our state governments, strengthen the wealth of our citizens, strengthen the banks that did not play with the funny money derivatives and played fair, and regenerate the industries that drive each state economy. It doesn’t take money to do this. It takes commitment and resolve. If the Republicans want to take charge of this issue, let them do it where they can — in the state houses they still control. Success in this venture will change the trajectory of the GOP from being a marginalized party of NO to a party of fiscal responsibility that says YES and has the ideas to back