SAN FRANCISCO -- What would happen to you if you got caught forging a mortgage application? You'd go to jail. And rightly so.
In one case in Florida, an employee of GMAC Mortgage admitted under oath that he personally forged 10,000 foreclosure affidavits. This low-level schlub is the tip of the tip of a massive iceberg, one of countless "robo-signers" whom voracious banks including GMAC, Bank of America, Citibank and JPMorganChase hired in order to kick American families out of their homes as quickly as possible.
Ignoring state banking laws, which require bank officers to review each foreclosure document to make sure all the facts are correct, banks instead hired low-wage "Burger King kids," as B of A execs called them, to sign thousands of foreclosures they never looked at. Many were signed under someone else's name.
Hundreds of thousands of foreclosures--maybe millions--were processed illegally by these huge banks gone wild. "Behind the question of improper foreclosure documentation lies a more important issue of whether lenders even have legal standing to foreclose because they lack the original mortgage note as required by law," reports The New York Times.
One guy got evicted from his house in Florida despite the fact that his mortgage had been completely paid off years earlier. Thousands of people who purchased illegally foreclosed properties may not have legal title.
Prosecutors in Ohio, Florida and at least 20 other states are investigating one of the biggest acts of wholesale fraud in the history of American business.
When the scandal broke on October 8th the banks declared a temporary moratorium on foreclosures. Two weeks later, they declared the whole fuss a simple matter of paperwork and resumed their happy work of reducing millions of jobless Americans to homelessness.
"There is not a single case where a foreclosure was made in error," said Bank of America spokesman Dan Frahm (if that's his real name). "The facts supporting the foreclosures are correct."
Bank of America plans to evict 102,000 families next month alone.
Adam Levitin, an associate law professor at Georgetown University, expressed doubt that the same banks that effectively rejected 99 percent of loan-modification applications by intentionally "losing" paperwork had suddenly become efficient. "The banks have dragged their feet and taken forever to do loan modifications, yet within less than two weeks they have managed to review hundreds of thousands of foreclosure cases," he said. "It is simply not credible."
"These are banks going to court and committing fraud," said Ira Rheingold of the National Association of Consumer Advocates. "For them to say this is a minor technical problem is mind-boggling."
Meanwhile, Florida officials are looking into charges that Fannie Mae and Freddie Mac foreclosed on 70,000 homes in the state during 2009 using forged court documents.
Enough is enough.
It is time to stop foreclosures.
Not for a few weeks. Not temporarily.
Foreclosure has always been terrible for America. It's bad enough to fall on hard times, whether it's due to a medical catastrophe or a job loss. Getting kicked out of your house forces you to couch-surf or camp outside, struggling to survive day to day. This makes it even harder to get back on your feet.
Foreclosures penalize spouses and innocent children. And, as studies have shown, shuttered houses reduce property values in the surrounding neighborhood.
At this writing millions of American families are in default on their mortgages. It's only going to get worse. The real unemployment rate is over 20 percent and rising. The global economy is still tanking. And the Obama Administration hasn't even bothered to propose a single jobs program. If this keeps up, we'll all be living outside while our empty former homes fall apart.
Flint, Michigan: America's glorious future?
It's not as though banks don't have other ways to induce people to meet their monthly nut. If you default, they can trash your credit rating. Good luck getting another mortgage later.
Even if you don't care about common decency or social stability, consider the cause of justice: The banks are criminal enterprises. Their executives are gangsters who think nothing of charging 40 percent interest on credit cards and lines of credit.
The banks don't deserve to get "their" houses back through foreclosure. (We don't even know if they're "their" houses.)
Don't look to Obama or the Democrats for help. They work for the banks. We need neighborhoods to form mutual-defense organizations. When a family gets evicted, everyone should help them move their stuff back in and guard the house to keep out the fraud-happy banksters and their rent-a-cops.
What of the banks? These corporate maniacs should be treated as harshly as the individuals they pretend to be for the purpose of buying campaign ads. What they've done is the equivalent of robbing a million convenience stores.
Lock them in prison. Throw away the key. And seize their property. Shut them down. Or, if they're "too big to fail," rescue them--through nationalization.
A nationalized bank might still do evil things. But their profits would belong to us--not corporate criminals.