How One Local Official in North Carolina Is Trying to Hold Wall Street Giants Accountable for Widespread Fraud
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Every recession that we’ve had it seems like the housing industry has been there. It’s been the leader in helping pull us out of a bad economy. It can’t do that right now because it’s weighted down with the effects of the consequences of the housing bubble and all that went on with it. I think for the general citizen you want to have laws that protect your rights to enjoy your property, and God forbid if you lose your job and eventually maybe lose your house that there’s the rule of law, there’s due process behind a foreclosure proceeding.
You may default on your payments, but nobody should get a free house. Banks that are purporting to be able to bring foreclosure proceedings -- they need to be able to prove they have the right to do that. If they can’t do that that’s a big problem. That leads to forcible taking of property when you can’t provide due process and you can’t prove you’re the entity that should be bringing these proceedings. Then you go into court and purport to say that you can, and then take the property.
I was on a phone call last year in the spring with a group of attorneys and it was amazing that we spent 45 minutes talking about racketeering statutes, the idea that some of these transactions could be the passing of stolen property. It was amazing. In America I would never think that I would be having this conversation.
JH: About big banks.
JT: Yeah. I grew up as a kid where our parents got our first home from a guy we knew who managed the bank. We had our own problems though. My dad lost his leg in a farming accident and spent a year in the hospital. My mom went blind. We could have lost our home, but we had a community supporting us and we had people who worked with us so that we could help pay our bills and keep our home. Now we’ve lost something. If "too big to fail" banks are going to continue to exist, if they’re not going to be broken up, then they have got to learn some basic things. They need to learn what kindergartners learn. When you go to school you learn how to write your name right, and you learn how to tell the truth.
JH: It shouldn’t be that hard. Let’s remember that the context here is the whole securitization process and they thought they had come up with a way to launder the risk out of high-risk loans by basically bundling them up into securities and then slicing those securities up further and selling them off to investors. When they did that they broke the chain between the lender and the borrower. That’s why you don’t have that kind of sense of connection between the banks as institutions and us as people.
JT: I think that’s exactly right. I think that is a big issue. Right now there’s a battle going on, and it’s going to be whether or not the securitization model continues. If it survives, how is it going to be put together in such a way that if they bundle loans and securitize them that it still pays to be boy scouts, and it doesn’t pay to be bandits? These transactions have got to be clear. If you don’t have that you really have big problems. So this office where nobody knows what I do as a public recorder has now become the center of the fact that all this paperwork isn’t in order. We’ve got to redevelop a system where we recover that. If we don’t it is a threat to democracy, it is a threat to the rule of law, and it is a threat to the foundational principles not only of property rights and property law, but commerce.