Sunday, February 19, 2012

Savvy Business Reporters & Their Pinheaded Take On Foreclosure Fraud Settlement

Blogger David Dayen writes in Firedoglake:

  • We’re going to have to endure this line of argument from those savvy business reporters, and Diana Olick is at the head of the pack, so we might as well take on this argument about the foreclosure fraud settlement directly.

    "Let’s take a step back for a second to remember the fall of 2010, when “robo-signing” came to light. The idea that one low-paid guy sitting in a room was signing his, or perhaps somebody else’s, name to thousands of foreclosure documents was appalling. It is appalling, no question. But let us not forget that the vast, vast majority of those foreclosures being processed were in fact legitimate foreclosures; it was the documentation process that was fraudulent. Banks didn’t foreclose on borrowers for no reason, they foreclosed because borrowers weren’t paying their mortgages."

  • It continues to amaze me how this “no harm, no foul” argument gets employed, when it would not fly in any other context in jurisprudence. Let’s rewrite that claim slightly, with a different scenario but the same spirit.

    "The idea that one rogue cop sitting at the police station was fabricating evidence was appalling. It is appalling, no question. But let us not forget that the vast, vast majority of criminal suspects are in fact legitimately guilty of some crime; it was the evidence gathering that was fraudulent. Cops didn’t pick up suspects for no reason, they picked them up because they did something wrong."

  • This flies in the face of hundreds of years of established law, and the cop, as well as the police department, would be rightly condemned by everyone for allowing a systematic process of evidence fabrication to go on. Practically nobody would make the argument that the suspects were guilty anyway, evidence fabrication be damned. But that’s precisely what Diana Olick is saying with a straight face.

For more, see CNBC’s Diana Olick’s Wrongheaded Analysis of the Foreclosure Fraud Settlement.

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