‘Flaws’ in Act 48 are actually teeth to protect homeowners

By Robert N. Herkes
POSTED: 01:30 a.m. HST, Jul 17, 2011

On Wednesday, this paper reported on a meeting sponsored by collection lawyers to discuss Act 48 — Hawaii’s mortgage foreclosure reform (“Attorneys say flaws mar new isle foreclosure law,” Star-Advertiser).

It appears this meeting was a gripe session for those who previously enjoyed a free ride on a fast track through a giant loophole in Hawaii’s foreclosure law.

Act 48 has taken the wind out of their sails because of its explicit moratorium on a law from the 1800s. That law allowed a bank to sell a home at a foreclosure auction in just four weeks — without requiring the homeowner’s knowledge.

Until Act 48, these lawyers used that law to steamroll through the vast majority of Hawaii’s foreclosures. That process had virtually no consumer protections, nor any third-party oversight.

With the fraud, deception, mismanagement and mistakes that have come to light during this national foreclosure fiasco, I feel no sympathy. Continue reading →

Letting Bankers Walk
By Paul Krugman, The New York Times
18 July 11

Ever since the current economic crisis began, it has seemed that five words sum up the central principle of United States financial policy: go easy on the bankers.

This principle was on display during the final months of the Bush administration, when a huge lifeline for the banks was made available with few strings attached. It was equally on display in the early months of the Obama administration, when President Obama reneged on his campaign pledge to “change our bankruptcy laws to make it easier for families to stay in their homes.” And the principle is still operating right now, as federal officials press state attorneys general to accept a very modest settlement from banks that engaged in abusive mortgage practices.

Why the kid-gloves treatment? Money and influence no doubt play their part; Wall Street is a huge source of campaign donations, and agencies that are supposed to regulate banks often end up serving them instead. But officials have also argued at each point of the process that letting banks off the hook serves the interests of the economy as a whole. Continue reading →