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.