After the Bush administration presided over the worst financial collapse since the Great Depression, American households lost about $16.4 trillion of net worth. The value of real estate alone dropped by $6 trillion.
Instead of making the big banks eat these losses, our government decided to let the middle class pay for Wall Street’s mistakes – even if it meant circumventing the law. “Rocket dockets” (up to 1,000 cases per day) and “robo-signing” (the mass production of false affidavits) enabled the biggest robbery of all time. Some homeowners faced court-ordered foreclosure even though they never took out a mortgage!
David Dayen has laid it all out in a new book, Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud
Example of “robo-signing”
Political analysts still manage to wonder why people are angry in a time of economic recovery, without ever even hinting recognition of the scarring impact of the foreclosure disaster. More than 9.3 million American families gave up their home between 2006 and 2014, either in a foreclosure or a short sale or some other transaction. That translates to about 14 million people, all of whom have family and friends and colleagues who at least know of the pain caused by the foreclosure crisis. There have been more since then.
It didn’t have to turn out that way. All of the losses didn’t have to be placed upon homeowners. Somebody could have been held responsible. We could have enforced the simple rule that you can’t take a person’s home with false evidence. This bare minimum would have engendered some faith that the system works, that justice still burns somewhere in America.
“Somebody could have been held responsible.” Instead, the Obama administration looked the other way during the “fraudclosure” crisis. They did the same thing on U.S. war crimes, on CIA torture, and on widespread warrantless surveillance of Americans. Only the truth-tellers went to federal prison, never the criminals.