Abelson on robo-signers last week:
“Truth is, bankers just can’t stand prosperity, even after their near-death experience of a couple of years ago, when so many of them, emphatically including the gargantuas, were kept alive only by grace of rich Uncle Sam generously ladling out our tax dollars. The nub of the problem were the lads and lassies assigned by the banks to review the mortgages and swear to the courts that everything was jake, as required by law before foreclosure received the necessary judicial blessing. They cheerfully signed affidavits to that effect, typically without bothering to actually review the documents or even having the faintest notion of what they were supposed to do.
The irony, of course, is that given the 16 million to 17 million unemployed or underemployed dying to work, the banks and their proxies could easily have gotten qualified folks to do the job. But instead, they chose to save a couple of bucks by hiring any number of unqualified “robo-signers.” It was either unbridled arrogance or simple stupidity—take your pick.
Ever since word got out about the first legal challenge to the legitimacy of such foreclosures, we’ve had the sinking feeling that the banks were once again in hot water. The action of their stocks last week when the story got some play in print and online did nothing to dissuade us from that bleak notion.
Neither we nor anyone else have the foggiest notion of how much damage this latest scandal will inflict on the banks or their investors’ net worth, but the hit, as intimated, could be substantial. And the ultimate effects on the economy’s most prominent invalid—housing—are bound to be baleful.
What is clear is that the banks should have paid the extra $2 an hour.”
Too funny, in a pathetic kind of way.
Barron’s OCTOBER 16, 2010