AVOIDING DOING ONE MORTGAGE AT A TIME.

AVOIDING DOING ONE MORTGAGE AT A TIME. I have posted a number of times on the need to clean up toxic assets and bad mortgages “one mortgage at a time.” In March, 2009, I said in this post: “The assets will have to be located and traced, probably one mortgage at a time. It’s going to take a long time, and we have yet to begin.” Since then, rather than hire lots of people to tackle problems, the banks seem to have attempted broad-brush solutions just as they did when they issued the mortgages. The problem for a number of banks now is that they are being confronted with broad-brush attacks on their broad-brush actions. The news reports are full of descriptions of the attacks. The attorneys general in all 50 states have launched a joint investigation. Banks are being attacked for the use of “robosigners” who are not familiar with the matters in affidavits they submit. Investors in mortgage-backed securities are threatening to “put” them back to the banks. James Surowiecki in this New Yorker article cites an academic study of 1700 bankruptcy cases which involved foreclosure. Necessary documents were missing in more than half of them. (I had surmised that there would be a lot of backoffice problems as early as October 2008.) Surowiecki calls the back-office crisis “Foreclosuregate.”