Anything But Prison

Because it really isn't befitting our leading job creators:

The Independent Foreclosure Review was supposed to be a full and fair investigation of the big banks' foreclosure abuses, and it was trumpeted as the government's largest effort to compensate victimized homeowners. Federal regulators, who designed the review, forced banks to spend billions to carry it out. Millions of homeowners were eligible and hundreds of thousands submitted claims. But Monday morning, the very regulators who launched the program 18 months ago announced that it had all been a massive mistake and shut it down.

Instead, 10 banks have agreed to pay a total of $3.3 billion in cash to the 3.8 million borrowers who had been eligible for the review. That's an average of around $870 per borrower.

Considering the average mortgage payment in this country is about $1,000 a month, that should solve everything.

As an alternative, they could've simply forced the banks to relinquish claims on any houses for which they couldn't provide the note---which would have allowed hundreds of thousands of borrowers to stay in their homes, and which would have been observing a longstanding principle of property law that goes all the way back to the Magna Carta. But it would also have required the banks to write down hundreds of billions of dollars in delinquent loans, and because that might've adversely affected Confidence in The Markets---we might have even discovered the banks couldn't cover the losses because the Treasury stress tests were bogus---we let them make amends by remitting pennies on the dollar. Struggling for another reason to explain why our regulators continue to behave this way, year after year, but that's the only one that ever seems to stick.

How this resolves the foreclosure crisis or prevents more house-stealing in the future, I have no idea. One suspects our leaders don't, either, and that the default policy mode at this point is to paper over the problem and leave it to the next administration to sort out. Too bad for the millions of Americans who are still trapped in bank-indentured servitude.

---Baron V