Krugman on the Mortgage Morass- Will Courts Hold Banks Accountable?

Friday's New York Times online carried Paul Krugman's analysis of the developing housing mortgage crisis. As the Nobel-prize-winning economist explains, it is becomes clear that no arm of government-- not the regulators, the courts, or the White House-- are fully ready to confront the fact that many mortgages aren't worth the paper they are written upon.

As Krugman explains,
Now an awful truth is becoming apparent: In many cases, the
documentation doesn’t exist. In the frenzy of the bubble, much home
lending was undertaken by fly-by-night companies trying to generate as
much volume as possible. These loans were sold off to mortgage “trusts,”
which, in turn, sliced and diced them into mortgage-backed securities.
The trusts were legally required to obtain and hold the mortgage notes
that specified the borrowers’ obligations. But it’s now apparent that
such niceties were frequently neglected. And this means that many of the
foreclosures now taking place are, in fact, illegal.

Consumer Law Conference Held at Fort Richardson on September 9

We had the honor of participating in a consumer law conference at Fort Richardson's National Guard Armory  on September 9. Judge advocates, paralegals and civilian attorneys with all military services based in Alaska came together in a one day CLE session for courses focusing on protecting service-members and their families from unfair business practices and helping them to navigate the legal system.

I was asked to lead the session on the Fair Debt Collection Practices Act and Alaska's Unfair Trade Practices Act. I provided a short primer on these key consumer protection laws, drawing heavily on materials I had been exposed to at nationally-known FDCPA attorney Pete Barry's three-day intensive FDCPA Bootcamp in Minneapolis in June. ( Pete tells me I am the first Alaska attorney to graduate from the bootcamp.) But the best part of the session was the back and forth with the participants who deal with clients every day who are exposed to abusive debt collectors and other shady operators. It helped remind me that, while we are ostensibly dealing with financial matters, often the real issue is human dignity and restoring self respect for clients who have been unfairly abused.

In these difficult times military families are facing incredible pressures. Some of the pressures are inevitable results of their mission, but unwarranted abuse from debt collectors and being taken advantage of by unscrupulous operators are things we can do something about. Thanks to Jim Wherry, Fort Wainwright Law Center's Chief of Legal Assistance, for pulling together this event.

Foreclosures Riddled with Faked Documents

Today's New York Times carries a comprehensive story about the growing crisis as more and more courts across the country are recognizing that they have been asked to foreclose on homes based on faked and non-existent documentation.