You know how the lax paperwork in securitized mortgages was just going to get cleaned up and then we’d go back to foreclosing as usual?
Maybe not (from the WSJ).
Ohio’s attorney general threw a wrench into the banking industry’s push to quickly restart foreclosures by fixing faulty paperwork, and pressed them to modify mortgage loans.
In two letters released Friday, Attorney General Richard Cordray criticized a number of banks and loan-servicing companies, including Wells Fargo & Co.; Ally Financial Inc.’s GMAC Mortgage; Bank of America Corp.; and J.P. Morgan Chase & Co. Mr. Cordray said the banks are trying to paper over fraud committed in foreclosures with temporary fixes that don’t address underlying problems in the banks’ practices.
“It is not acceptable for a party who believes they submitted false court documents to merely replace those documents. Wells Fargo and any other banks are not simply allowed a ‘do-over,'” he wrote in the letter to Wells. The other letter was sent to Ohio judges, who were asked to notify Mr. Cordray when banks file substitute affidavits.
He demanded that the banks vacate any court order or motion that was based on an improper paperwork. In an interview Friday, Mr. Cordray said the banks would “be well-served to work out a settlement with the borrowers to modify the loans and work out payments.”
It’s going to get interesting. The reality is that politics deeply impacts out interpretation of the law. Right now – in large part because the Administration has tipped so far in favor of the banks and large-scale finance community, I think we’re seeing the beginning of a wave in which law will be interpreted – by people like Cordray – in ways that leads to interesting remedies for homeowners.