Showing posts with label Property titles. Show all posts
Showing posts with label Property titles. Show all posts
Saturday, October 9, 2010
Wednesday, October 6, 2010
Foreclosure Fraud Reveals Structural & Legal Crisis
http://www.ritholtz.com/blog/2010/10/foreclosure-fraud-reveals-structural-legal-crisis/
An outstanding read
The woes in the mortgage market are complex, deep and structural. This is more than just a few shortcuts taken by paralegals here and there — there are endemic structural problems within the US real estate and mortgage markets. (Yesterday, we touched upon the problems associated with foreclosure mills).
We are not discussing economic problems of too many homes for sale and falling prices. What is being discussed here is a full blown crisis underlying home titles, foreclosure procedures, and securitized mortgages. The rampant, epidemic and systemic abuse of legal property protections is now reaching a crisis.
Today, we will put that crisis into the greater context of the entire real estate industry, from purchases to the securitization of mortgages to default and foreclosure. What this discussion reveals are a series of short cuts, (il)legal fictions, and an utter disrespect for the mechanisms of legal property transfer that underlies our entire system of Capitalism. As Hernando de Soto discovered, the organized, reliable, functional systemic approach to property rights is the key reason why “Why Capitalism triumphs in the West and fails everywhere else.”
And we will see that at every step along the process, the reckless rush for easy profits has systemically undermined these legal property rights — how mortgages are recorded, the bungled bundling of notes to be securitized, the electronic system that fictionalized the process of assembling transfer documents, and how all the players along the way — The investment firms, banks, law firms, even court system, utterly lost sight of what they were doing.
An outstanding read
The woes in the mortgage market are complex, deep and structural. This is more than just a few shortcuts taken by paralegals here and there — there are endemic structural problems within the US real estate and mortgage markets. (Yesterday, we touched upon the problems associated with foreclosure mills).
We are not discussing economic problems of too many homes for sale and falling prices. What is being discussed here is a full blown crisis underlying home titles, foreclosure procedures, and securitized mortgages. The rampant, epidemic and systemic abuse of legal property protections is now reaching a crisis.
Today, we will put that crisis into the greater context of the entire real estate industry, from purchases to the securitization of mortgages to default and foreclosure. What this discussion reveals are a series of short cuts, (il)legal fictions, and an utter disrespect for the mechanisms of legal property transfer that underlies our entire system of Capitalism. As Hernando de Soto discovered, the organized, reliable, functional systemic approach to property rights is the key reason why “Why Capitalism triumphs in the West and fails everywhere else.”
And we will see that at every step along the process, the reckless rush for easy profits has systemically undermined these legal property rights — how mortgages are recorded, the bungled bundling of notes to be securitized, the electronic system that fictionalized the process of assembling transfer documents, and how all the players along the way — The investment firms, banks, law firms, even court system, utterly lost sight of what they were doing.
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