Criminal Action Warranted!

David Dayen is the News Desk Editor for the left-leaning online news site Firedoglake.com. The site reports for its largely liberal audience on political topics at a national level. In his October 14th editorial “Democrats: Foreclosure Fraud Not ‘Technical Errors,’ Regulatory and Criminal Action Warranted,” he criticizes the Federal Housing Finance Agency (FHFA) for trying to pass off the foreclosure freeze by banks as due to procedural errors rather than acts of fraud. So far, six Democratic Senators have sent letters to the Acting Director of the FHFA, Ed DeMarco, requesting that he take serious action toward the mortgage servicers who were responsible for the day-to-day management of the mortgage loan accounts (Dayen).

Dayen argues that the banks should be penalized for their sloppy paperwork, systemically flawed policies, and total disregard for quality control. He goes so far as to say that “we should be filling out criminal charges” against the banks, and I agree. The banks have been bailed out and defended by our government on multiple occasions, when it seems they don’t have enough respect for the public to do their job competently. It becomes more and more apparent that the mortgage lenders' main priority is making money, even by criminal means.

Dayen supports the Democrats’ suggestion for a full moratorium on foreclosures while servicers work with homeowners to review and modify the mortgage loans, some documents of which have turned up missing altogether (Dayen). While investigations are still ongoing, I think it is unlikely that criminal charges will be pressed against the banks in question, which is unfortunate because, in my opinion, simply having such shoddy, negligent policies accompanied by the subsequent illegal eviction of homeowners should be enough to prosecute the responsible banks. This would also ensure that compensations would be paid to the families who have moved into a newly foreclosed home, only to realize later that it was wrongfully repossessed and sold, and must be returned to the rightful owner; That is, if the title insurers decide not to make good on their promises, which I am sure they will.

For now, Dayen writes, the most we can hope for is continued intense pressure on the banks to right what they have wronged and to update their standard operating procedures. He is right to suggest that the banks may have committed some serious crimes that should be thoroughly scrutinized before letting them off the hook. I think his comments are in the best interest of the people, rather than the bankers.