William K. Black – HUFFINGTON POST

Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle
Posted: January 19, 2011 11:13 AM

‘An Economic Philosophy That Has Completely Failed’

Excerpt:

10. The Mortgage Electronic Registration Service (MERS) is unregulated. MERS, at best, was a system designed to evade county recorder fees. No one – and that includes MERS’ controlling officials – knows the true condition of the mortgage instruments that MERS is supposed to be registering. At best, it is a scandal that threatens the stability of homeowners and holders of instruments that are supposed to be secured by mortgages. MERS is an “obvious gap” in regulatory protections that demonstrates once more the wealth and job destroying consequences of the “completely failed” anti-regulatory philosophy that Obama promised to root out.

11. The foreclosure scandal revealed an “obvious gap” in regulatory protections – no one regulates the foreclosure process. (The underlying epidemic of accounting control fraud by the nonprime mortgage lenders generated the “echo” epidemic of foreclosure fraud.) Bank of America, the second largest financial institution in America, acquired Countrywide in order to secure its personnel and its mortgage servicing portfolio. Countrywide was notorious for its fraudulent and predatory mortgage lending practices. Placing its employees in charge of servicing – the banking operation that controls the foreclosure process – guaranteed epic abuses. (Bank of America also managed to generate pervasive foreclosure abuses out of the staff it had prior to acquiring Countrywide.) Bank of America personnel, and personnel of other major servicers, eventually confessed that their foreclosure actions relied on massive, universal perjury (a felony). These “robo signing” crimes occurred at a frequency of roughly 10,000 monthly at more than one large servicer. Our most elite banks have confessed to committing hundreds of thousands of felonies.