The 2010 United States foreclosure crisis, currently referred to as foreclosure-gate, is an ongoing issue related to an alledgedly widespread practice of improper foreclosures by large banks and other mortgage lenders. What initially appeared to be sloppy record keeping among some lenders has been revealed in many cases to be non compliant procedures for recording loans.
Will Bankers go to Jail for Foreclosure-gate?
CNN is reporting that law enforcement officials are investigating whether banks and their employees broke federal law in the handling of foreclosures:
Mortgage lending and foreclosures on full automatic
A Federal Reserve review will examine Sloppy foreclosure practices, and the toxic legacy of casual record-keeping.
An summary of the crisis can be found in the Whispers Blog which states that:
In order to maximize the revenue stream in the securitizaton process, the subprime lenders, trusts and banks cut as many corners as possible to save money.
Included in this cost-cutting was the cost of record keeping.
Banks, trusts and subprime lenders didn’t keep very good records in their pell mell rush to shove money to middle America and fuel the massive housing bubble.
They didn’t keep good records and, in the process, they violated individual state laws mandating that they had to file records with the local state county clerk’s on who owned what mortgage title.