Our plant at the Wall Street Journal’s editorial board managed to insert ‘Puter’s post as today’s lead editorial. Witness the striking similarities between the two. The WSJ writes:
Talk about a financial scandal. A consumer borrows money to buy a house, doesn’t make the mortgage payments, and then loses the house in foreclosure—only to learn that the wrong guy at the bank signed the foreclosure paperwork. Can you imagine? The affidavit was supposed to be signed by the nameless, faceless employee in the back office who reviewed the file, not the other nameless, faceless employee who sits in the front.
We’re not aware of a single case so far of a substantive error. Out of tens of thousands of potentially affected borrowers, we’re still waiting for the first victim claiming that he was current on his mortgage when the bank seized the home. Even if such victims exist, the proper policy is to make them whole, not to let 100,000 other people keep homes for which they haven’t paid.
Now President Obama is refusing to sign a previously noncontroversial measure to have states recognize notarized documents from other states. Among other things, the bill would have streamlined the process of moving people out of homes they can’t afford and therefore would have helped to allow housing markets to clear and begin to heal. Allowing supply to meet demand in housing must not be one of the “progressive agendas” that Mr. Obama recently told Rolling Stone he is committed to advancing.
If evidence emerges of policies or actions that wrongly threw people out of their homes, by all means investigate and prosecute violations of law. But allowing people to live in homes without paying for them is not cost-free. That cost will be borne directly by investors in mortgage-backed securities and mortgage servicing companies, and ultimately by American taxpayers, who now stand behind 90% of new mortgages, thanks to guarantees by Fannie Mae, Freddie Mac and the Federal Housing Administration.
The bigger damage here is to the housing market, which desperately needs to find a bottom by clearing excess inventory and working through foreclosures as rapidly as possible. The moratoriums further politicize the housing market and further delay a housing recovery. In an economy and a financial system engulfed in Washington-created uncertainty, the political class has decided to create still more.
Hmmm. Let’s see what ‘Puter wrote yesterday on the same topic.
The WSJ mentions a stupid presidential veto of a noncontroversial notarization streamlining bill. ‘Puter said:
President Obama vetoed (pocket veto, natch) a relatively simple bill related to interstate recognition of notarization of documents. The bill is intended to smooth interstate recognition and authentication of legal documents, such as mortgages and affidavits. Relatively uncontroversial, as ‘Puter mentioned. However, the bill got caught up in the current furor over foreclosure documentation problems.
“OK. There’s a little similarity there. What else do you have, ‘Puter?” Well, there’s the WSJ’s recognition of the harm to the housing market’s recovery, and the impediment to finding a market bottom. ‘Puter wrote:
In order for the housing market to return to normalcy, housing prices must find a bottom. Prices will not find a bottom until all the defaulted prices [(sic) ‘Puter meant “properties” here — ed.] are returned to the market and prices adjust to the glut accordingly. Putting off the day of reckoning helps no one, except the wrongdoing borrower and the “social justice” activists.
“Well, that is getting a little too close, ‘Puter, but it’s still not proof that the WSJ’s editorial board reads The Gormogons.” The third time’s the charm. The WSJ writes that permitting defaulted borrowers to stay in their homes rewards wrongdoers who don’t even bother to claim they aren’t in default. Here’s ‘Puter yesterday:
But this leaves a different problem. What happens to the defaulted borrowers while the banks sort proper ownership out? Why, they get to stay in property rent and payment free, likely for a period of many months to several years. In most cases, defaulted borrowers are not claiming that they have paid on the mortgage, or that they now have or will have resources to pay the mortgage. These borrowers have defaulted. They are using a technical defense to hold up the inevitable liquidation. This only exacerbates the housing crisis.
The WSJ has better writers than ‘Puter, but it’s rewarding for ‘Puter to see his views mirrored in a leading voice of fiscal sanity.
And remember, you heard it here first.