How A Massachusetts Court May Have Set Off Another Housing And Banking Catastrophe

Business Insider

Banks got hammered yesterday after the Massachusetts Supreme Court essentially ruled that two foreclosures in the state were illegal because in the process of securitizing the loan, the foreclosing bank lost control of the actual note, and thus didn't have the standing to foreclosure.

Felix Salmon, who nobody would accuse of being pro-bank, sees a real possibility here of a systemic housing market and banking system catastrophe if this ruling is repeated in other states.

Just about everyone who has ever been foreclosed on in Massachusetts will want to confirm that the foreclosure was legal. The Supreme Court ruled that the plaintiffs should actually get their homes back, which should also strike terror into the heart of anyone who bought a foreclosed home at any point.

It just doesn't take much imagination to wargame out a disastrous situation. As Felix notes, if you got this ruling in California, then that would be endgame right there, perhaps.

While the banks may have failed to satisfy the letter of the law, this is deeply problematic justice, since from an economic standpoint, the foreclosing banks were certainly within their rights (there have been a few cases of improper foreclosures, but very few, and it's not obvious that these improper foreclosures are the same side of that coin).

With this ruling, you're left with the problem that people who didn't pay their mortgages get to keep their houses because of paperwork mistakes, which is an unjust remedy.

In December and the first four days of this year, the financial sector was smoking hot. It may have just hit a huge brick wall.

Deceptive Big Bank Ads Will be Key to Election 2010

A recent Intercept posting illustrated how money was pouring into the Brown Campaign in the "Massachusetts Miracle"and why this money was being pumped into the likes of Brown (and 20 more anticipated campaigns with neocon hacks posing as disenfranchised conservatives). The Center for Media and Democracy also sees the connection between meaningful financial institution reform and the neocon poser funding machine:

Even before a recent U.S. Supreme Court decision blew the lid off corporate campaign spending, it was clear that the big banks would be key players in the 2010 election cycle.

Unemployment will remain high and so will resentment against the banks, a volatile combination that will encourage savvy Members of Congress to continue to fight for meaningful reform of the financial sector. While a major reform bill is winding its way though Congress right now, it only addresses aspects of the problem, leaving loose ends for reformers to pick up and pursue in 2011.

Groups for and against the current financial reform bills have already conducted their polls, polished their messages and are starting to engage in ad-war skirmishes that foreshadow the deluge of big bank spending to come, as Wall Street fights to elect candidates who will protect their interests and privileges.

Full Article

A Look at the Money Behind the "Massachussetts Miracle"

As unprecedented amounts of out-of-state money have funded a media blitz, and seesawing polls -- some highly questionable -- to show Republican Scott Brown up to a dead heat with Democrat Martha Coakley after a recent month's 9-point deficit, election integrity activists are examining the peculiar nature and sources of funds for the Brown campaign.
The pdf containing the linked chart is available for download by right-clicking here.