The Foreclosure Circus: Send In The Clowns


—And, where are the clowns?
Quick, send in the clowns.
Don’t bother, they’re here.—Stephen Sondheim

Indeed, the clowns are here! Or, to be exact, in Washington.

With each passing day, we learn just what a sham the entire foreclosure process has been in this country. Banks and other lenders admitting they had low level employees sign off on foreclosures not even bothering to read, or even understand, all the material before them. In many cases, according to press reports, lenders can’t even prove they own clear title to the properties.

What a joke. What a circus. Which brings me to some of the Obama administration clowns.

Obama’s Secretary of the Department of Housing and Urban Development called it “shameful,” in a column he wrote for the Huffington Post, that the housing crisis may have been made worse (if that is possible?) by lenders who failed to follow proper procedure ( or any procedure) when foreclosing on other people’s lives.

But where were these clowns the past couple of years? Obviously, not paying much attention to what was going down from coast to coast.

Secretary Shaun Donovan writes in his HuffPo post, “The recent revelations about foreclosure processing–that some banks may be repossessing the homes of families improperly–has rightly outraged the American people…The notion that many of the very same institutions that helped cause the housing crisis may well be making it worse is not only frustrating–it’s shameful.”

You think?

Too bad Secretary Donovan is just coming to terms with this now.

sheila bairAnd, here’s another D.C. based, government clown: Sheilia Bair, Chair of the Federal Deposit Insurance Corporation who told C-SPAN, according to a Reuters dispatch, that “foreclosure is a very serious thing and it should only be undertaken after loan modification efforts are not feasible. And that the files are fully documented.”

Bair forgets to mention that the administration’s best efforts at loan modification have been a failure. And, why should we expect the FDIC to have any handle on what banks are up to?

So now, everyone is pretending to be shocked…totally shocked…by what has been going on right under their big, fat, red clown noses.

The foreclosure process nationwide had come to a virtual halt. States are investigating. The federal government is investigating. People who bought distressed properties wonder whether they own the title free and clear?

And, now, finally, here come the so-called regulators! Send in the clowns, indeed. Don’t bother, they’re here!

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. Excellent article,

    But the main problem is MERS

    The whole of the US property title and mortgage system has been subverted by the banks. 61% of mortgages go through the MERS system which is ELECTRONIC. Yet according to state laws ALL mortgage and title transfers must be done on PAPER.

    MERS is the point of failure because it has no properly authorised employees to sign for mortgages and did not transfer funds to the previous mortgage holder, and has also attempted to split the mortgage and loan note on ALL mortgages it processes even though the Supreme Court has said mortgages cannot be split in this way.

    Ergo. tens of millions of mortgages have been illegally transferred and tens of millions of properties have title which needs quieting in a court of law, also All MBS is void and needs to be put back to the originators. All REMICs are void unless they incormporate a paper trail of mortgage transfers (outside MERS).

    Bair says that securitization is a good thing. But with a paper-based title/mortgage system securitization is not possible. Only lawmakers can change this – not regulators.

  2. william dziedzic on

    Anonymous, you use the term “subverted” as if the banking system is trying to pull one over on borrowers. One of the main reasons for the MERS network is to prevent the need to assign the mortgage . One of the benefits of not having to create and record assignments is that you don’t need to pay recording fees to the town or county clerk’s office. All it does it make make the secondary market and securitzation more efficient.

    The conclusion that tens of millions of mortgages have been illegally transferred because of MERS is inacurate. MERS merely acts nominee for the lender and is the mortgagee of record; it does not purport to be the holder of the note any any point. A note endorsed in blank can be passed without the need to record an assignment of mortgage and is accurately tracked within the MERS network. If anything, MERS helps to simplify the land records.

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