serfing usa

An unknown number of foreclosed-upon citizens, possibly numbering millions, certainly in the hundreds of thousands, may retain possession of their houses, whose titles are now in a state of legal limbo. I don't know if this is the first shot of the revolt which will end with "the world turned upside-down," but it's certainly a case of the people winning out over the banks.

The fundamentals of this developing story are as follows:

On September 24, three liberal representatives in the House wrote a letter to Fannie Mae pointing out that the lender is using "foreclosure mills" to process eviction orders. These are “law firms representing lenders that specialize in speeding up the foreclose process, often without regard to process, substance or legal propriety.” The Florida AG was already on to these law firms fabricating documents to make foreclosures and evictions happen.

The same day, California AG Jerry Brown asked GMAC to stop foreclosures and evictions until it could prove it was attempting to work with borrowers to make arrangements for payment that would prevent foreclosure.

Next, according to the linked "Truthout" article, "On September 29, the Washington Post reported that a top federal bank regulator had directed seven of the nation’s largest lenders to review their foreclosure processes, after learning about widespread mishandling of homeowner evictions. Besides JPMorgan Chase, they included Bank of America, Citibank, HSBC, PNC Bank, U.S. Bank and Wells Fargo."

All the biggies.

The basic problem is that most of these mortgage contracts have changed hands so many times that nobody knows who actually has title to the property. It's been lost in the endless electronic shuffling of the contracts. The Truthout story does a pretty good job of explaining the details of this mess.

What's important is the practical meaning of these new developments for us (the serfs) and for the banks (the lords of the manor). Think of all the questions this raises, for example:

Will foreclosed-upon house owners be able to stay in the properties-in-limbo from now on and never pay another dime?

Will underwater owners be able to stop paying and not have to worry about foreclosure?

How many people who have been evicted already will be able to resume living in the houses in question?

And how long will it be before the banks, who are going to be the Big Losers in all of this, having taken another huge hit to their balance sheets, come crying to Obama and Geithner for another handout?

This time we can't allow them to get paid off. If we can prevent it, the people, especially the ones who still have roofs over their heads thanks to the banks screwing themselves, will have won a significant victory.

It would be just, fitting, and beautiful to see the Wall Street banks that caused the depression we're suffering through today get hoisted on their own petards, and the people who those banks attempted to swindle out of property, savings, and/or lending obligations, walk away from the table with more than they came with. Reversal of fortune it's called.