Thursday, October 7, 2010

Influence Requires Discretion or How Bank's Mortgage Fraud Almost Became Legal

In our Saturday post we mentioned the building firestorm involving apparently fraudulent mortgage foreclosure documents and processes.  Today CNBC made it graphic with an article about a bill on the President's desk which might bail the banks out of the mortgage foreclosure frauds by changing the notarization process and taking it out of the authority of the states.  Subsequently, the White House issued a statement, which morphed the CNBC article, that the bill would not be signed, although the issue would be studied for future appropriate action.  This bill had languished in the Senate Judiciary Committee without hearing until it was removed from the Judiciary Committee on September 27th and passed with a unanimous vote without debate.

As Yves Smith wrote yesterday, this bill was possibly an attempt by the banks to bull doze over state laws and pave a freeway out to institutionalized abuse. 

Today, Yves Smith wrote about Representative Grayson's written request that the Financial Stability Oversight Council investigate banks failure to adhere to contractual and legal requirement in the mortgage and mortgage backed securities markets as a systemic risk.  While Yves Smith quotes Felix Salmon on where the foreclosure mess is heading, her naked capitalism blog has, and I trust will, paid extensive attention to these mortgage foreclosure frauds and the fundamental damage it is doing to individual liberties and the legal process. 

President Obama needs to clearly and fundamentally define his position going forward as one which favors the American people and the protection of their inalienable rights to life, liberty, and the pursuit of happiness, which in 18th Century term meant the opportunity to provide food, clothing, and shelter for one's family as opposed to protecting the powerful monied interests of the financial banking empire at the expense of the common citizen.

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