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Fraudclosure Errors Destroying Americans’ Property Rights

Posted By Barry Ritholtz On October 19, 2011 @ 7:14 am In Bailouts,Foreclosures,Legal,Psychology,Real Estate | Comments Disabled

Over the past 2 years, I have warned repeatedly [1] about the dangers to American property rights caused by massive bank fraud, A deadly combination of MERS, robo-signing, and illegal shortcuts have created a horrific situation. A bedrock of our society — the ability for the owner of a piece of real estate to confidently convey that property, along with all associated property rights — is now in danger.

It was the inevitable result of the frauds that too many state Attorneys General seem unwilling to prosecute.

The end results of that massive fraud, and the State’s refusal to hold the wrongdoers accountable, are simply this:

“The highest court in Massachusetts ruled that a homeowner who bought a foreclosure that hadn’t been properly conducted by the foreclosing bank in 2006 didn’t have legal ownership of the property.

The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn’t properly convey title when foreclosing. The problem has gained attention nationwide because of banks’ use of “robo-signing” and other dubious practices that may have broken chains of title on foreclosures.

The case follows a previous state court decision that voided a foreclosure when banks couldn’t prove that they owned mortgages when they initiated foreclosure proceedings.”

(WSJ, State Rules on Foreclosure [2])

The Rule of Law is yet another bedrock foundation of this nation. It seems to get ignored when the criminals involved received billions in bipartisan bailout monies.

The line of bullshit being used on State AGs is that we risk an economic crisis if we prosecute these folks.

The people who claim that fail to realize that the opposite is true — the protest at Occupy Wall Street, the negative sentiment, the general economic angst — traces itself to the belief that there is no justice, that senior bankers have gotten away with economic murder, and that we have a two-tiered criminal system, one for the rich and one for the poor.

Today’s NYT notes the gloom that has descended over consumers, and they suggest it may be home prices [3]. I think they are wrong — in my experience, the sort of generalized rage and frustration comes about when people realize the institutions they have trusted have betrayed them. Humans deal with financial losses in a very specific way — and its not fury.  This is about a fundamental breakdown of the role of government, courts, and leadership in the nation. And it all traces back to the bailouts of reckless bankers, and the refusal to hold then in any way accountable.

There will not be a fundamental economic recovery until that is recognized.

>

Previously :
Florida AG Takes Orders, Money from Fraudclosure Firm [4] (October 12th, 2011)

About That Perjury, Judge . . . [5] (January 11th, 2011)

Foreclosure Mill Attorney Explains How to Commit Fraud [6] (December 30th, 2010)

The Big Lie on Fraudclosure [7] (October 29th, 2010)

Foreclosure Fraud: “Systemic, Industrywide, Pervasive” [8] (October 16th, 2010)

The Impact of Error From Securitization to Foreclosure [9] (October 15th, 2010)

Legal Impossibilities & Foreclosure Errors [10] (October 14th, 2010)

Why Foreclosure Fraud Is So Dangerous to Property Rights [11] (October 12th, 2010)

Foreclosure Fraud Reveals Structural & Legal Crisis [12] (October 5th, 2010)

Sources:
State Rules on Foreclosure [2]
NICK TIMIRAOS
WSJ, October 19, 2011

http://online.wsj.com/article/SB10001424052970203658804576639553359831240.html

Gloom Grips Consumers, and It May Be Home Prices [3]
BINYAMIN APPELBAUM
NYT, October 18, 2011

http://www.nytimes.com/2011/10/19/business/economic-outlook-in-us-follows-home-prices-downhill.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2011/10/fraudclosure-errors-destroying-americans-property-rights/

URLs in this post:

[1] warned repeatedly: #previously

[2] State Rules on Foreclosure: http://online.wsj.com/article/SB10001424052970203658804576639553359831240.html

[3] it may be home prices: http://www.nytimes.com/2011/10/19/business/economic-outlook-in-us-follows-home-prices-downhill.html

[4] Florida AG Takes Orders, Money from Fraudclosure Firm: http://www.ritholtz.com/blog/2011/10/florida-ag-taking-orders-dirty-money-from-fraudclosure-firm/

[5] About That Perjury, Judge . . .: http://www.ritholtz.com/blog/2011/01/about-that-perjury-judge/

[6] Foreclosure Mill Attorney Explains How to Commit Fraud: http://www.ritholtz.com/blog/2010/12/foreclosure-mill-attorney-explains-how-to-commit-fraud/

[7] The Big Lie on Fraudclosure: http://www.ritholtz.com/blog/2010/10/the-big-lie-on-fraudclosure/

[8] Foreclosure Fraud: “Systemic, Industrywide, Pervasive”: http://www.ritholtz.com/blog/2010/10/systemic-industrywide-pervasive/

[9] The Impact of Error From Securitization to Foreclosure: http://www.ritholtz.com/blog/2010/10/the-impact-of-error-from-securitization-to-foreclosure/

[10] Legal Impossibilities & Foreclosure Errors: http://www.ritholtz.com/blog/2010/10/examples-massive-foreclosure-errors/

[11] Why Foreclosure Fraud Is So Dangerous to Property Rights: http://www.ritholtz.com/blog/2010/10/why-foreclosure-fraud-is-so-dangerous-to-property-rights/

[12] Foreclosure Fraud Reveals Structural & Legal Crisis: http://www.ritholtz.com/blog/2010/10/foreclosure-fraud-reveals-structural-legal-crisis/

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