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10/17/10

Banking industry: A Foreclosure Sitcom - by Al Lewis

First we learned America's biggest banks couldn't properly lend. Then we learned they couldn't keep themselves solvent without taxpayer assistance. Then we learned they couldn't effectively work with troubled borrowers in a bursting housing bubble. And now we've learned they don't even know how to foreclose.

Last week, attorneys general from 50 states launched investigations into the defective and fraudulent paperwork banks have been filing in courts as they foreclose their bad loans across the land. Banks have been caught deploying "robo-signers" who sign off on thousands of documents and affidavits without even so much as looking at them. This is more than just a little paperwork problem. Ohio Attorney General Richard Cordray put it best: "This is about the private-property rights of homeowners facing foreclosure and the integrity of our court system, which cannot enter judgments based on fraudulent evidence."

Imagine losing your home and then another bank says it wants to foreclose on you, too. "But I was already foreclosed," you might say. And the bank might say, "Whoops. The court gave your house to the wrong bank."

For more: A Foreclosure Sitcom - WSJ.com

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