Termites and Foreclosures

We wrote in a 2008 post:
"The banking industry has never been set up to effectively and humanely handle large volumes of foreclosures, because it is something that they're not good at and something that was never anticipated on a large scale. The participants in the foreclosure business are yet another unregulated, unseemly lot. Unleashing this process on a large scale is like introducing termites into a house."

Now, yet again, Congress and the pundits are focusing on symptoms like documentation and robosigners. The media discussion, which will feature lots of political posturing and horse trading in front of the upcoming elections, will deflect attention from the fact that tranches of MBS's need to be written down which will again raise questions about portfolios where the paper is held.

Even potentially positive events for consumers, like sales of foreclosed homes have been revealed to be poisonous. Auctioneers have transferred homes to reasonably informed buyers with attached first and second mortgages! No one is responsible for even providing this kind of information to bidders. There's no accountability anywhere in this dismal financial chain and we wonder why consumers are not leading the recovery.