RealityTrac.com has the new numbers. We're now in the 18th straight month with 300,000 or more foreclosures. Why is this happening?
According to Barry Ritholtz, author of Bailout Nation, the problems aren't simply a matter of paperwork glitches. Apart from legitimate issues of people not paying their mortgages, what we're seeing is rampant fraud on the part of the banks.
What's worse, in my view, is how rampant fraud and cloudy ownership claims now constitute a genuine threat to property rights, which is the linchpin behind modern capitalism in America. Indeed, things are so bad that title insurance companies are now reluctant to guarantee properties that banks are foreclosing on because of improper foreclosure proceedings. Fraud and ownership claims are made even more murky by securitization claims and homes that have been improperly foreclosed on, even when they've been paid in full.
Huffintonpost.com is reporting on the story of a Florida woman who bought a foreclosure home, only to be told later that the property's foreclosure might not be valid. Cases like this, coupled with banks improperly changing locks on homes that aren't in foreclosure or foreclosing on homes that don't even have mortgages -- constitute a crisis of historic proportions, Ritholtz said.
Diana Olick, who was reporting on this story for MSNBC's Larry Kudlow, responded by saying "You're always going to see those stories," and that even though they shouldn't happen she dismissed the story by asserting, "The cops often knock on the wrong door in other cases as well."
You know, this is akin to saying "It doesn't matter if you get accused of assault or rape. If you haven't done anything, you have nothing to worry about."
Rampant fraud ... Property rights under assault ... S**t happens, live with it ... This is how low our standards have dropped in our mortgage and housing market.