Posted by Jonathan J. Miller -Monday, February 6, 2012, 9:18 AM
Last week there was plenty of outrage from the directed at Freddie Mac who was found to have been betting against homeowners who were stuck with higher interest rates. They claimed there was a firewall and that they stopped the practice before FHFA, their regulator, told them to – but that wasn’t the point. It’s an unconscionable action from that institution.
FHFA, was once again late to the party (think housing boom and accounting scandal, of formerly named OFHEO). Now a government owned financial institution who is critical to the US housing mortgage market was betting against the US homeowner in conflict of their charter.
In President Obama’s SOTU speech, he announced creation of an office to prosecute those who violated the law related to the housing bubble. The initial reaction of many, including myself was “where were you 3 years ago?” as if this action was too late.
The Freddie Mac debacle and now the MERS lawsuit reestablishes that it is not too late. Without due process, faith in the US financial system will not be repaired.
It has long been held that MERS was merely a clever way to avoid local filing fees and enable rapid transaction of complex financial instruments.
As much as it seems like we are rehashing the past, a sense of justice is missing from national dialog about the aftermath of the housing boom.
I am counting on NY AG Schneiderman to help us feel better about what is right and wrong, no matter how far after the fact.