By Tiffany Sanders on January 6, 2012 in Foreclosure, Political
2011 has been a year of mixed progress and disappointments. There have been too many victories, defeats and delays to lay them all out, but here are some of the key events on both sides of the fence, and a bit about what they mean for us moving forward.
On the downside, most of the Attorneys General from around the country have dropped the ball, spending all of 2011 (and a bit of the preceding year) talking in circles around a wholly inadequate settlement of the “foreclosure mess” that lets big banks largely off the hook, creates broad-ranging immunity and does little to help borrowers who have lost their homes to the illegal and unethical actions of banks and mortgage servicers rather than using that time to investigate the extent of the problems and forge real solutions. While there have been a few notable hold-outs and a few states have taken independent action, the overwhelming trend is toward a slap on the wrist and a conscious decision to look the other way. The impact of those few holdouts—and even whether or not they will hold out in the end—remains to be seen.
And the Attorneys General aren’t the only ones falling down on the job; ProPublica’s audit of government audit reports showed that when those reviews finally started to happen, they revealed an overwhelming number of errors—for GMAC, for example, the reports showed that homeowner income had been miscalculated in more than 80% of cases. But that discovery didn’t lead to sanctions, nor to any increased oversight.
The news isn’t all bad, though. While the banks seem to be sitting comfortably behind the curtain of non-enforcement, MERS hasn’t fared quite so well this year. 2011 kicked off with the resignation of MERS CEO R.K. Arnold. Perhaps the organization thought a change in leadership would be its saving grace, but the move proved to be too little, too late. So did the Rules change which required members, several years into the practice, to stop foreclosing in MERS’s name. By the time the company made these meager gestures, it had caught the attention of a handful of state and local officials who weren’t inclined to turn the blind eye we’ve grown accustomed to at the federal level.
Again, however, the victories paled in comparison with the leeway that’s been granted for as long as MERS has been in operation. Two Registers of Deeds, one in Massachusetts and one in North Carolina, stepped up to publicly challenge MERS. They calculated lost revenues in their counties and states attributable to MERS’s circumvention of the legally-required recording process. They audited their registries. One petitioned his state Treasurer to withdraw funds from Bank of America and deposit those funds with an institution that was not a member of MERS. Ultimately, one of those Registers began declining robo-signed documents for recording and two states filed suit against MERS. But at the end of the day (or in this case, the year), MERS is still in business and the vast majority of Registers across the country haven’t drawn any such line.
A similar mixed result came out of Tom Cox’s widely-reported case against GMAC Mortgage—the case that made “robo-signing” a household word (though it is a word that Tom does not like). While the Maine Supreme Court upheld the trial court’s award of Cox’s fees, GMAC got a pass on the larger issue. It wasn’t even as if the court glossed over the problem; rather, after extensive discussion of the egregious nature of the company’s behavior, the court declined to sanction those actions in any way.
As 2011 wrapped, the federal government was still stunningly lax in oversight of programs that were supposed to help homeowners, robo-signed documents were still being routinely recorded and accepted in court proceedings across the country, and Attorneys General from nearly every state were preparing to sell out homeowners and past victims of wrongful foreclosures.
In the face of small progress and a lot of power and money working against us, there is one solid positive to report: our ranks our growing. Our hope for real change lies in the slowly but steadily increasing number of government officials, attorneys and other professionals who are recognizing the untenable situation in which this country finds itself and are stepping up to say so and take action. That includes officials like Registers John O’Brien and Jeff Thigpen, the handful of state Attorneys General who have stood up against the easy settlement the majority is pushing for, and the hundreds of dedicated attorneys who attended our live events last year and who have attended the Boot Camps since 2006 and put what they learned into practice. With enough warriors, we will continue to turn the tide.
