Banks Using Fake Documents for Foreclosure

It has now been revealed that banks in the US have been using phoney documents regarding home foreclosures. The documents are being used by the banks to accelerate the home foreclosure procedure. There is a great deal of evidence showing this to be true and that it violates all kinds of laws from many levels of government.

Many politicians have come out in real and phoney denunciations of this disgusting practise. Speaker of the House Nancy Pelosi along with about 30 other California representatives, Democratic Senators Al Franken of Minnesota and Robert Menendez of New Jersey have called for an investigation in the baking practices of these criminals. Attorney generals in several states have also begun investigations. As a result home foreclosures have been temporarily stopped in a few states.

This is how the situation was explained:

“Notarized documents are required to transfer a property from one institution to another. But typically banks do not produce paperwork proving they have “standing” or the legal right to foreclose. Instead they supply affidavits that have been signed by a legal services firm hired by the bank or loan servicer. These signatures are, in theory, to be administered by a neutral, third party notary public, who is legally required to read and review the documents.

What has emerged, however, is that the notarization system was pervasively abused by major financial institutions. Among other practices, it has been revealed that notarizations took place at an impossible rate of thousands per month per reviewer, that they occurred even before the attested documents were actually prepared, that signatures ostensibly representing the same individual bank employee were clearly produced by more than one person, and that notarizations took place in offices far away from where documents were signed.”

This procedure is something that is not to be unexpected. After all, as Marx clearly pointed out in Das Kapital: the circuit of capital C+V+S must move as quickly as possible in order to assure the constant flow of capital. While Marx was directly referring to manufacturing in general, I believe the same can be applied here. The longer a home remains occupied with not mortgage payments coming, in other words not offered on the market, value is lost. Anytime an asset with as little liquidity as a house remains unsold, the more a liability it becomes and the less value it has on the market.

This rush to gain these homes as quickly as possible is done in order to make the ownership of the home as profitable as possible. The faster a home leaves a bank’s liability column, the more money it stands to make. This rush to collect as much money as possible is caused by the profit motive. In what is the true capitalist fashion, this drive for profit takes its true unethical, criminal form.

Source of explanation:
http://www.wsws.org/articles/2010/oct2010/mort-o07.shtml

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