President Obama has announced a new task force group to look into whether or not big banks are criminals for their behavior in recent years involving home mortgages and foreclosures.
When a home owner and a bank enter into some level of loan or mortgage agreement, it is a process that can take months, so the larger super banks had to devise a way to buy and sell tens of thousands of homes in one fast transaction.
They accomplished this by bundling them together. Thousands of families’ shelters were bought and sold in the blink of an eye.
After doing this enough times, the actual physical paperwork of these mortgages has, in essence, been lost, allowing homeowners to challenge their removal by asking for proof. In some cases all the home owner has to do is refuse to leave and squat in their own home.
“Anyone who has been foreclosed on should now be phoning up their lawyers and trying to find out if the foreclosure was legal,” said Financial Analyst Felix Salmon. “If it was, then the borrower should be able to get their deed, and their home, back from the bank.”
The President’s new task force will be looking into these power banks to see whether or not what they have been doing to millions of people with millions of homes is in fact criminal behavior.
“I’m asking the Attorney General to create a special unit of federal prosecutors to expand our investigations into the abuse of lending, packaging, and risky mortgages that led to the housing crisis,” Obama said.
He said that the new unit will be in charge of speeding up the process allowing home owners to get back on track quicker, and ultimately turn the economy around.
Attorney General Eric Holder has since announced he has a working group, led by the Attorney General of New York Eric Schneiderman, prepared to investigate the bidding, buying and selling of these bulk packaged properties and put the bankers on trial when action is needed.
“Our group is going to dig into all of the conduct that blew up our economy; it’s not really a secret, everyone knows what happened,” Schneiderman said. “We know what created the bubble and we know what created the crash.”
When the housing market went up, the banks were making so much money bundling these properties that they didn’t allow the market to return back down, effectively allowing people to easily get in heavy debt.
The special unit was concerned with the effectiveness of their work due to the sheer amount of work needed to sort out the paper trail, which alone could take years to sift through. But Schneiderman said that the president is taking the issue very seriously and has made it clear he will throw as many resources as they need their way.