I am very weary of the meme that more foreclosures are good for the economy, or the gem that lawyers and advocates who help homeowners fight banks are somehow the ones responsible for the destruction of the economy. Remember that piece-of-caca article in the Wall Street Journal in 2010 that said the robo-signing fraud epidemic was the fault of the foreclosure attorneys who uncovered it? Slick dodge, fraudsters. “You made me lie to the court by figuring out that I was lying to the court to steal houses.” I actually had opposing counsel citing to that article in their legal briefs.
Anyway, Abigail Field, lawyer and Daily Finance writer, exposes a new Reuters “article” for the bank propaganda that it is:
The Housing Crisis Is NOT Caused By Helping Homeowners
The Reuters piece aggressively misrepresents the idea that huge “shadow inventory” and the problems it causes for the housing market as proof that Due Process and efforts to stop banker fraud are hurting the housing market. That’s total B.S.
The first part is true–having huge shadow inventory and having lots of underwater homeowners is horrible for the housing market and the broader economy. But the second part–the assertion that judicial process, Due Process, and efforts to stop banker fraud are what’s causing the delays, is completely false.
Bankers Are Responsible For the Housing Crisis
Let’s be clear: The banks are responsible for shadow inventory and the underwater crisis. Not homeowners, not Due Process, not judges, not law enforcement. The banks are responsible in multiple ways, as I detailed when debunking the HousingWire version of this b.s. Here’s a recap:
First, en route to committing mass securities fraud the banks dishonored their contracts and failed to document the mortgage loans as they promised investors they would. As a result, they’ve had to fabricate nonsensical, obviously fraudulent and often sworn statements to try to foreclose. It’s that swamp of fraud that’s causing the delays.
Second, banks are manipulating housing market inventory, letting properties they own rot, not listing them for sale, and when auctioning them, sometimes outbidding third parties. Third, bankers’ securities fraud broke the secondary market for non-government backed mortgages. As a result, there’s a lot less capital to lend wannabe homeowners. Fourth, lender-driven appraisal fraud led to such inflated prices that the underwater problem is directly attributable to them.
Rather than deal in the reality that our housing crisis is banker driven and dare push the meme that bankers must be held accountable, Reuters is helping bankers (and their government allies) push the idea that if only we made it easy for bankers to use their fraudulent documents, the housing market would heal quickly.
She goes into the propaganda line by line, so go read the whole post at the link above.