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The Anti-Due Process Bias of Housing Reporters and Analysts
Nothing especially new here, just more "moral hazard is for the little people" double standards
Are we supposed to believe that there’s a material difference among borrowers in a judicial and non-judicial foreclosure state? Are those non-judicial states filled with more “responsible” homeowners who don’t default on their loans? Of course not. The only reason the rates are lower in those states is because banks can fast-track borrowers through the foreclosure process. In states where banks have to, you know, prove that they own the loan, they increasingly have trouble doing it.
Incidentally, the one non-judicial foreclosure state with rates above the national average is Nevada, where laws in place criminalized robo-signing and force foreclosure mill lawyers to verify their mortgage recordings with county clerks. In other words, banks couldn’t legitimize their conduct in Nevada, like in other judicial foreclosure states, and therefore cannot foreclose.
Somehow this is spun as a problem of the judicial foreclosure process instead of a problem of banks who have no way to prove ownership. The WSJ article is peppered with analysts claiming that the judicial foreclosure states “mute” the housing recovery, rather than saying the banks’ inability to prove ownership of the loans is the culprit. This line about Arizona and California is indicative of the sentiment:
Ripping homes from people, in this context, is seen as a good thing.
I’m sure the same analysts will go back to shaking their heads at California soon. Foreclosure cancellations are spiking there, because dual tracking has been curtailed, due to new rules ushered in by the Homeowners Bill of Rights. To these housing analysts, any action taken by the state that seeks to protect citizens risks allowing recovery to flourish. Foreclosures are good, and laws to protect homeowners are bad.
http://news.firedoglake.com/2012/11/19/the-anti-due-process-bias-of-housing-reporters-and-analysts/
Incidentally, the one non-judicial foreclosure state with rates above the national average is Nevada, where laws in place criminalized robo-signing and force foreclosure mill lawyers to verify their mortgage recordings with county clerks. In other words, banks couldn’t legitimize their conduct in Nevada, like in other judicial foreclosure states, and therefore cannot foreclose.
Somehow this is spun as a problem of the judicial foreclosure process instead of a problem of banks who have no way to prove ownership. The WSJ article is peppered with analysts claiming that the judicial foreclosure states “mute” the housing recovery, rather than saying the banks’ inability to prove ownership of the loans is the culprit. This line about Arizona and California is indicative of the sentiment:
Arizona and California, meanwhile, served as the epicenter of the housing bust. But their nonjudicial foreclosure process has allowed banks to take back properties from delinquent homeowners and resell them more quickly to investors and first-time home buyers.
Ripping homes from people, in this context, is seen as a good thing.
I’m sure the same analysts will go back to shaking their heads at California soon. Foreclosure cancellations are spiking there, because dual tracking has been curtailed, due to new rules ushered in by the Homeowners Bill of Rights. To these housing analysts, any action taken by the state that seeks to protect citizens risks allowing recovery to flourish. Foreclosures are good, and laws to protect homeowners are bad.
http://news.firedoglake.com/2012/11/19/the-anti-due-process-bias-of-housing-reporters-and-analysts/
