Mortgage Crisis: Monetary banking fraud or incomplete paperwork ??

Here are comments found in the Anchorage Daily News with regards to foreclosures in Alaska and the nation:

WASHINGTON (AP) - A joint investigation by every state and the District of Columbia could force mortgage companies to settle allegations that they used flawed documents to foreclose on hundreds of thousands of homeowners.

It could take months, at least, for any settlement to be reached. But legal experts say lenders could be forced to accept an independent monitor to ensure they follow state foreclosure laws. The banks could also be subject to financial penalties and be forced to pay some people whose foreclosures were improperly handled.

For banks, "the most efficient way for them to get out from under this is to settle across the board," said Kathleen Engel, a law professor at Suffolk University in Boston.

Employees of several major lenders have acknowledged in depositions that they signed thousands of foreclosure documents without reading them as required by state laws. . . . . . . .Read more: http://www.adn.com/2010/10/13/1499475/officials-in-49-states-launch.html#ixzz12oi0QQeA

Editor's notes: understand that the paper scandal as relates to residential foreclosures is much more about incomplete paper work than it is about banking/ monetary fraud. Specifically, in many, many cases, banks that originated home loans sold those loans to other banks, something that is perfectly legal. The problem is found in the fact that some of the original docs associated with these loans, were not passed on to the second banking entity. In some cases, signatures were forged on these original docs. Sounds like fraud ??

Well, yes. But our point is this: the loans, themselves, were made, the customers agreed and signed the original contracts, all of the purchases passed through escrow; they were all legitimate deals. The scandal has nothing to do with falsifying principle totals or "stealing" from the "unsuspecting" buyer or forging signatures on the actual purchase agreement.

The end result of this scandal will be a massive paper correction. Homes that are in foreclosure will remain in foreclosure. Only the time of bank repossession will be extended. Understand that more than one third of these homes are vacant, the buyers deserting their contracted obligation. All of the foreclosures are the result of buyers failing make their payments for, at least, three months. In many cases, delinquencies are for extended periods of time -- six months to a year.

In the end, this will be about paper work and little more. Understand that the homes in question were actually sold to folks who could not, for whatever reason, meet their agreed-upon payment obigations. The banking industry will be vilified because that is what Democrats bent on "social justice" do - they vilify, condemn and take-over.

One final thought: this is a state's problem, legally, not a federal problem. All the huffing and puffing within the Obama Administration is only about Obama trying to come up with something that will help in the coming midterms. In the end, this will be resolved on the state level.