Blogger Heroes

Posted on October 21, 2010
Filed Under finance | Leave a Comment

This is an interesting story on a number of levels. In the first instance, it is a major piece of investigative reporting that uncovered a systematic abuse of mortgage holders by institutional banks, yet it wasn’t broken by the mainstream media but by bloggers. It is a clear example of  the new paradigm of news distribution in the age of the internet. The type of Utopian individualism that everyone talks about but only ever seems to result in shitty link blogs like the one you’re reading now. But of course, the most important thing here is the story.  Large banks doing “robo-foreclosures” on a massive scale without exerting due diligence.  In essence treating people as nothing more than impediments to their bottom line. From The Washington Post

Epstein, a Fairfax County native who became an activist after she lost her job and became unable to pay her mortgage, launched a grass-roots movement against the country’s largest banks, which are facing the prospects of billions of dollars in soured loans and legal expenses.

Joining her were Michael Redman, whose foreclosure blog drew the White House into the controversy, and Thomas and Ariane Ice, who run a boutique law firm that was the first to depose “robo-signer” Jeffrey Stephan of Ally Financial’s GMAC mortgage unit in December.

In addition to trying to educate the public about the issue, the group had also been quietly passing along stacks of problematic documents to state and federal regulators, lawmakers, judges and law enforcement officials.

They pointed out that document processors such as Stephan had admitted in sworn depositions that they had signed off on up to 10,000 foreclosure documents a month, even though they had not reviewed them as legally required. They also shed light on foreclosure cases in which the paperwork appeared to have been backdated, forged or improperly notarized.

Now, at least five major mortgage companies have frozen some foreclosures. Attorneys general from each state have joined forces to investigate, and a federal task force is considering criminal charges in the matter. Some bank stocks have fallen on concerns that the issue of flawed paperwork could be a coverup for something even more serious. And economists worry that the fragile housing market, where one in four houses on sale is in foreclosure, could take a devastating hit.

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