As 2010 skids to a close, we’re all wondering just what do we have in store for 2011.  Well, that’s really an open question in my mind.  I can envision some dramatic and radical scenarios that start to turn things around, but I’m not very hopeful, primarily because of the bumbling disasters of 2010.

We’re dug into a real deep hole here…and just in case you’re not real clear and need help remembering..let’s take a little recap of the issues that bombed us out in 2010:

1. The Subprime Lenders, Banks and Foreclosure Mills Have Caused Chaos in Our Courtrooms- This is an overarching fact that cannot be ignored.  Under this heading are a whole range of problems and costs that are ultimately being borne by all taxpayers.  What is most frustrating is that precious little attention is paid to the fact that most of these problems originated with failed businesses that are no longer around to fix the problems they’ve caused.  It’s as if a car company built millions of vehicles then sent them out onto the roads.  Now the brakes are failing, the accelerators are sticking and they’re causing the roads and highways to be violent and dangerous for everyone….but regulators, lawmakers and judges are just allowing these failed cars to continue plying our roadways.  It really is staggering to think that the wrongdoers who caused all this mess have suffered no consequences while we all slog away here in the trenches trying to sort out their chaos…no arrests, no real investigations, no consequences for flawed, fraudulent and in some cases criminal activities that cost us all billions.  The proper course off action would have been to gut the lenders and prosecute the criminals that caused this mess back in 2008, similar to the way this was handled in the S & L crisis in the 80′s.  We failed to do this so the problems caused by these lenders and the entire failed industry continue to spew across this once great country like vomit from a frat boy with alcohol poisoning.  Our county is poisoned by toxic debt and we can’t get better until we are purged of this poison.  Time to come face to face with this reality.  Time to force the banks to suffer the crushing losses that are hiding right there in plain sight on the balance sheets.  There is no way around it and the comeuppance will not be pretty.

2. The Banks, Their Agents and Law Firms Are Lawless- In the face of this crisis, the banks and all their agents have thrown the law and the rule books out the window.  In most cases they know their conduct is wrong or questionable or illegal, but they’re making conscious decisions to plow ahead without following the rules….and why should they? There has been precious little consequence for not playing by the rules.  The best example of this situation is the failure of the foreclosure mills in Florida to follow the rules of the Florida Supreme Court that mandated all complaints be verified as of February 2011.  There was a vast period of time when tens of thousands of these complaints were not filed in compliance with the rule and to this day most are not correctly verified, but this is just ignored across the state.  Just one example, but the most blatant.  The foreclosure mills are not law firms, as Mother Jones noted in the groundbreaking article, “Fannie/Freddie’s Foreclosure Barons“, these are very questionable enterprises that deserve intense scrutiny and investigation.  I hope that they will be rooted out, closed and the work they were doing farmed out to say….Florida’s regional legal aid offices?  I’ve got so many problems with these foreclosure mills, but a big question I have is how much law is actually being practiced in these places?  Our whole judicial system is predicated on lawyers signing and taking responsibility for the documents filed in court but as this system is collapsing we see that it’s impossible to know who signed many of these documents and even if they were signed by an attorney how much of the work was performed by slave wager earners in foreign countries?  I’ve got a bad enough problem with bad lawyers doing bad work, but I’m really, really incensed by the thought of some sweatshop worker turning out the work that throws an American onto the street…especially when that slave was being paid with that homeowner’s tax dollars.  Don’t show me Bar opinions that justify off shoring legal work, if there’s one job that should stay here under some kind of American supervision, it’s legal work.

3. What We Still Don’t Know About Robo Signing- The robo signing scandal is another example of an entire industry gone wild with disastrous national consequences.  But just think about this for a moment.  Even after all the national attention the robo signing controversy got we still have no idea exactly what the robo signer controversy was.  We all think the affidavits were merely not notarized properly or that there was a problem with personal knowledge, but is there any deposition or formal investigation to confirm this?  Absurd pleadings are filed in courtrooms all across this state and probably the country seeking to “Withdraw Affidavits” and “Ratify Nun Pro Tunc” Final Judgments. This situation is totally without precedent in our country’s entire judicial history and yet it continues to move forward unabated.  Foreclosure sales and auctions are still occurring based on the assumptions, but we have no facts at all on the fraud or the misdeeds.  How in God’s name can judges continue to move forward in any of these cases, especially when they’ve been alerted to fraud on the court, without further inquiry. I mean, how do we know that there isn’t something far more nefarious afoot, such as the situation of a dead woman executing tens of thousands of affidavits that was just reported today in the Wall Street Journal.

4. The Banks Will Kick Down Your Door Whenever They Want to- Across this country there are teams of jack booted thugs driving around in pick up trucks with lists of properties on them.  If your property is on their list, they may just decide to kick down your door.  If they want to they may seize your property.  They will change the locks on your door.  They have no court authority, they have no right to do this, but they will do it anyway.  Think you’re safe just because you’re not in foreclosure?  Think again….I have clients from all over the state who are not even in foreclosure but this is happening to.  Think law enforcement will help you?  Think again….the biggest fight initially is getting law enforcement to even respond to these calls, much less even take a report and forget about getting them to actually charge any crimes.  Their budgets are tight and law enforcement is totally tone deaf to this issue.  I’ve got cases where the thugs came back again and again, taunting and harassing my clients and my clients called law enforcement over and over, but they refused to do anything at all…saying this kind of harassment and breaking in was not their job…now think about it…if you cannot count on law enforcement to keep you safe from these thugs….who can you count on?

5. The Economy Is Only Getting Worse- Our international economic model is broken and America is suffering badly. The value added middle class jobs we need to pay the debts and living expenses necessary for basic survival have been shipped offshore.  The middle class engine that once drove the Locomotive Called The American Economy is gutted, gone, broken, destroyed.  America’s business, legal and elected kleptocrats sold out the American middle class to the highest bidder and they have no plan to make this right.  Think about it…do you hear anything coming out of any of our centers of power that give you any hope that we’re making this better?  Where are the ideas and leadership that will put millions of Americans back to work?  Where are the real plans to trim spending and refocus our priorities?  I spend hours every day reading and watching, hoping and praying, but I find nothing that give me any hope….and the scary thing is that it will take years to implement solutions once they have been proposed and worked out….and I hear nothing to suggest solutions are on the horizon…very scary indeed.  And to my friends who point to the poppycock numbers coming out of New York and Washington DC, I say…first, you’re foolishly naive if you believe those numbers and next, even if there’s any truth to them, selling out America’s key industries, resources and assets to foreign interests for a short term boost in the bottom line is hardly a legitimate formula for long term success.

6. Government and Industry Responses to The Fraudclosure Crisis Have Been Disastrous- I remembered starting of 2010 thinking that we would be heading in the right direction.  I counseled my clients to fill out their paperwork and negotiate with their lenders.  I networked with realtors because I expected a vibrant and robust short sale market.  But none of this happened.  Instead our government spewed billions of dollars directly to the criminal lenders, their servicers and agents.  Borrowers spent millions of hours in time and money filling out forms, standing in line and playing their modification and short sale games.  What do we have to show for it?  Almost nothing.  Talk to any realtor, purchaser or seller.  Reasonable short sales that should have closed rotted and died.  Homeowners that could have been paying modifications and wanted to pay were denied for every reason and for no reason at all.  Each state is careening in different directions in the middle of this tempest, but no state seems to be taking a more absurd direction than Floriduh.  While other states like New Jersey and Ohio are now slamming the brakes on Fraudclosuregate, Floriduh’s Legislature, in it’s infinite wisdom dolled out $9.6 million dollars and gave the Fraudclosure Mills a license to go full steam ahead…the result?  The mess has been greatly exacerbated, basic rights trampled on and a perpetuation of a failed system.

7. Foreclosures Are Not Good For The Economy-There are no reliable numbers out there, but there are tens of thousands of homes across this country that the banks have foreclosed on then just left abandoned.  Even more cases are filed when it just doesn’t make rational economic sense to do so.  As long as you’ve got a homeowner who’s willing to make a mortgage payment, we’d all be far better off letting that homeowner stay in the home with a modification than allowing the banks to foreclose….but that’s not what we do.  All across this country homeowners are rejected any kind of help which sends the home careening into the black hole of foreclosure….to what end?  Even if the mill gets their judgment promptly will they net more in the near or long term than they would by throwing the homeowner out  into the street?  The answer is probably no….especially while our economy continues to drag.  And yet foreclosures continue…some smart people still trumpet the absurd company line that, “We gotta get these foreclosures done so we can get this economy moving again.”  This attitude ignores basic economics…forget about the equity of it.   Finally, a great deal of attention has been paid recently in Florida to the amount of foreclosure cases that are backlogged in courts, but no one has yet to examine why these cases have been abandoned.  So few cases are defended at all, so that’s not the reason and few homeowners get modifications so that’s not the reason.  I believe in many cases, the chain of ownership and custody of documents is so collapsed that the mills just can’t figure how to get it moving again….so why did they file it in the first place?

8. Process Servers- This subset of this whole enterprise gets it’s own special place here.  I’m just dying for someone to tally up just how much I’ve personally paid to serve summonses on the ubiquitous Unknown Tenants.  500,000 foreclosure cases in Florida by 2011 times 4 unknown tenants in each case, then stretch that back for however long this has been going on.  And if these costs are passed on through the REO sale to lender/plaintiff, i.e. Fannie/Freddie then that means I’m paying those costs…what do you think I think about that?  And now let’s turn to the bad or faulty service.  Just how much of it is out there?  Too early to tell, but based on what I’ve seen so far, I’m betting that this is going to be explosive.  How much diligent searching and inquiry were done?  Again who knows, but I’m guessing we’ve got real problems here.

9. Wall Street Records its Fourth Most Profitable Year Yet- There’s  really not anything else to say here.  Just soak it in and think about it.  How is America doing in the middle of all of this?  Remember, these obscene profits were booked courtesy not of any innovative new business, but based on the great largess of you the America people.  It’s an obscene outrage on such a grand scale.  I can’t stand the thought of one taxpayer being thrown onto the street by any company that’s lapped up lots of goodies from the trough that was laid out before them by Congress and the policy players that have assisted these institutions in the looting and pillaging of the American promise, but the fact of the matter is that all of them have.  This will never be made right while that gross disparity exists.

10. The Press and The People- For much of 2010, most of the reporting focused on the homeowners and their inability or unwillingness to pay mortgages.  During the latter part of this year, we’ve seen a very dramatic shift in the reporting with more and more serious news organizations reporting on the much larger and far troubling issues swirling around the cesspool that is foreclosures.  Sure people should be paying their mortgages, but let’s talk about the real economic factors that got this country into this very bad place and the state and federal policies that are making it much worse.  How did our leadership let all these bad mortgages get written in the first place? What are the perverse incentives roiling around inside the evil banking and lending institutions that have been consolidated and are now drunk with the kind of power that only immunity and impunity can bring?  Our press now has their teeth firmly dug into these issues and so long as the First Amendment survives, we may all learn the gross and sickening details about about all of these issues.  That is perhaps my biggest lesson for all of 2010, the value of press and primacy of the First Amendment.  When this is all said and done, we’ll all take a good hard look at our press and the First Amendment.  I predict a renaissance for press and reporting in general…and oh, yeah…I think we’re going to find fraud and incompetence and corruption and stupidity on a scale and magnitude that this country has never, ever seen before.

So what exactly will 2011 have in store for all of us?  Well, that’s for tomorrow.  I of course have a few thoughts that I’ll drop on here for all of you to dig into and read.  Until then Happy New Year!

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