Friday, October 08, 2010

Bank of America Halts Foreclosures

The Wall Street Journal writes BofA Halts Foreclosures. "Bank of America Corp. is placing a moratorium on all foreclosure proceedings and sales across the U.S. amid mounting political pressure on big U.S. banks to examine foreclosure-documentation problems."

I first heard about this issue last night on the Daily Show. Here's the interesting part to me: "The nation's largest bank by assets is the first financial institution to stop all foreclosure actions amid revelations that the banking industry had used "robo-signers," people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes."

Really? Robo-signers? The banks don't even read the forms they generate before they sign them? It seems no one reads documents before they sign them. No one reads license agreements before they click Accept. No one reads cell phone agreements or credit card agreements or insurance policies. You can't. They're in legalese and are too long and depend on external contract law knowledge to really understand. The issue is we can't just refuse to sign or accept them because then you can't do anything. Elizabeth Warren is absolutely right that regulation is needed to clean this up. There's no other way.

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