Administration was warned of foreclosure scandal

The Washington Post reports:

Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people’s homes as fast as possible, often without regard to the rights of homeowners.

In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders’ help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

The Obama administration admits it knew of the problem, but says it could not do anything because they needed the lenders’ help in carrying out their agenda.

You rarely see it expressed so crisply: this administration refused to protect the legitimate rights of homeowners, because that would have made it hard for them to carry out their program of subsidizing insolvent borrowers.

POSTSCRIPT: Let’s not forget, the mortgage modification program was itself a complete failure.

(Via Power Line.)

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