Lawyers got it right on the foreclosure mess

An opinion piece in the Washington Post by Eugene Robinson.

Banks and other lenders, it seems, made statements in courts of law that turned out not to be true. Because judges have such an underdeveloped sense of humor when it comes to prevarication, this mess may be with us for a while.

The mortgage industry would love to blame the whole thing on predatory, opportunistic lawyers who are seizing on mere technicalities to forestall untold numbers of foreclosures that should legitimately proceed. The bankers are right when they complain that the delays are gumming up the housing market, as potential buyers for soon-to-be-foreclosed properties are forced to bide their time until all the questions about documentation and proper title are answered.

But it’s the bankers’ fault that there are so many instances of foreclosure documentation with legal loopholes big enough to drive a moving van through. During the years of the real estate boom, lenders cut corners with paperwork to make as many loans — and sell them to other lenders, which often sliced and diced them into securities that were then sold to investors — as quickly as possible. This haste and inattention to detail, now coming to light, are partly responsible for the current crisis. …

A nice change of pace from the major news outlets who try to dumb everything down to “deadbeat borrowers.”