They Still Don't Get It — Robo-crimes are not victimless!

The main problem with resolving the mortgage and housing crisis has emerged as flat-out ignorance and indifference even on the part of the Washington Post which referred to Robo-signing as a “victimless” crime.

This ignorance stems from a rancid combination of laziness and persistent ideology that disregards both known facts and the need to ascertain “unknown facts.”

The conclusion reached by most people is that the banks were wrong in submitting false documents with false declarations of fact and then forging them with unauthorised signatures and then notarizing false signatures — but that doesn’t mean that a borrower should not be foreclosed. This feels like explaining high finance and legal doctrine to a three-year old — except the people receiving the explanation should know better and in fact do know better.

No property transaction can be accepted based upon falsified, forged, fraudulent documents — so it does mean that there cannot be a foreclosure unless true documents reciting true facts are used in a foreclosure. The community bank on the corner has nothing to fear from the fact that they must show ownership of the loan and be able to provide a full and complete accounting on the loan. They never had a problem.

The assumption behind the Washington Posts reckless characterisation of these victimless crimes is that when you boil these “securitized loans” down, they are really no different than the community bank loan, that the documents will be real, and that the accounting for the loan will be full and complete.

That assumption is plainly wrong. And the corollary assumption that the banks were just “cutting corners” is equally wrong. The failure to investigate what the banks are hiding is an egregious failure of responsibility for both the press and law enforcement.

We can all agree that a person who borrows money should pay it back. We should also agree that such a person should be obligated to pay it back once, not multiple times. And we should also agree that the lender should only be paid once, not multiple times. Because so many people wish to gloss over the niceties of proper documentation, the banks are being permitted to claim losses they never endured, claim ownership of loans they never funded or bought, claim lien foreclosure, evict millions from there homes, take title to property, create blighted cities that once thrived, abandon the property they foreclosed, and all without taking an ounce of responsibility for the effect on investors who advanced all the money, the homeowners who advanced their lives and all the property, the taxpayers who have paid the defaulted loans repeatedly to banks that did not own the loans, and the nation’s prospect as the leader of the free world.

If the net effect is that the homeowner is left with full liability to the real creditor, or that the homeowner pays twice on the same loan, or that the creditors received full or partial payment multiple times from multiple sources, and if that is what is being covered up by Robo-signed documents, then how can we assume that these crimes are victimless? the investors are being cheated out of the repayment of the loans they made because the banks took the money and ran. The homeowners are being foreclosed for a debt that has been repaid out of their tax dollars. the cities and counties and states are being deprived of tax revenue for expenses that in large part were the result of planning for services and infrastructure to accommodate the false real estate boom.

Robo-signing is only victimless if these were “White lies”. Without further investigation and discovery how does anyone know that Robo-signing was not as mean-spirited and pernicious as it sounds when put into solid language — the forged signing of fraudulent documents containing false declarations meant to deceive the reader, the public and the recording offices? Hint: Start with the amount of money that is claimed as defaulted from 2006 to the present and apply payments received from all parties, not just the borrower. And remember that if the payment came from the taxpayers, it came from the borrower who pays taxes just like everyone else. If the money came from insurers or counter parties to credit default swaps, and the creditors (investors who advanced the money) are satisfied, why should the borrower pay it again? — especially to banks that were never more than conduits, never had any loss, never funded the loan and never purchased the loan.

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