Oh, what a tangled we we weave,
When first we practise to deceive!
- Sir Walter Scott, Marmion (1808)
Earlier this week I posted on how a culture of lies developed in our real estate markets to such a degree that Wall Street and other market insiders:
* Knew the real estate industry was producing toxic mortgage loans.
* Purchased insurance for these toxic loans and/or the toxic securities (that the toxic loans were thrown into), knowing that the underlying loans would likely fail.
* Are reacting to the irregularities and fraud now being discovered (in the loan origination process) by ignoring basic and legally mandated procedures in an effort to foreclose on as many homes as possible.
This is what makes the following so interesting ...
Today, courtesy of Zero Hedge, we learn that not only are financial servicers for the mortgage industry foreclosing on mortgages which nobody apparently owns the title, but (according to a letter from Congress sent to Fannie Mae) the industry is now outsourcing their foreclosure avoidance obligations to legal firms and lawyers "who specialize in kicking people out of their homes."
So much for doing what's in the best interest of the homeowner, and the consumer. But wait. It gets better.
From the same letter signed by Reps. Frank, Grayson, and Brown, we also find out that some of these firms have been accused of "fabricating or backdating documents, as well as lying to conceal the true owner of the document."
And why not? If the industry had to go by the book, and tried to establish ownership and follow proper due diligence procedures, they wouldn't make as much money.
This might help explain why the financial service industry now seems willing to counterfeit court summons in an effort to create more efficient foreclosure mills. As Rep. Grayson's office points out:
"Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means that you could theoretically be foreclosed on without ever knowing there was even a foreclosure case against you."
There's more, but you get the picture. Fraud, deceit, and a culture of lies - and not simply over leveraged borrowers - are the primary culprits behind our current real estate and mortgage mess.
However you look at it, none of this bodes well for home owners.