Last evening at twilight I was driving my rent-a-car up Interstate Five north of Seattle with a vivid testicular fear of being trapped in the very metaphor of a failing society racing into a dark future. All around me loomed the monuments of an out-of-control financial credit Moloch – the tilt-up chain store boxes with their giant logos glowing against the distant craggy peaks of the Cascades (many of them active volcanoes which, like Mt. Saint Helens, might blow their tops any day). At every compass point sprawled the McHousing pods of American dream mortgage time-bombs silently blowing families to financial smithereens, and banks with them, including, incidentally last Friday, the state of Washington’s own Shoreline Bank just off I-5 north of Seattle, seized by the FDIC. My way was lighted, as darkness finally stole in, by the endlessly replicated dispensaries of fast food-dom (pizza-burgers-chicken-fries-and-shakes) provoking this nation of overfed clowns to ever-greater feats of gluttony, medical catastrophe, and bankruptcy. And, of course, these were my fellow-travelers in the perpetual stream of cars plying this great thoroughfare of the tragic western littoral, burning up gasoline that had traveled all the way from the sands of Abqaiq or from some sweltering platform off the Niger Delta, where dangerous, angry, armed men in Zodiac boats plot mayhem nearby among the mangrove thickets. Not to mention the row-upon-row of idle cars parked in the lagoons surrounding the countless malls and strip-malls and auto dealerships that flanked I-5 for fifty miles north of Seattle. Cars, cars, cars, as far as the eye could see where the sodium-vapor lamps cut through the crepuscular murk. Sasquatch was a no-show. But Sasquatch don’t drive.
This was the week when the US housing fiasco got even more extra-special interesting as the Bank of America suspended mortgage foreclosures in twenty-three states, and the Connecticut Attorney General (Richard Blumenthal, who is running for Chris Dodd’s senate seat) declared a 60-day moratorium on foreclosures (a political ploy do ya think?). Also of interest, Ally Financial suspended foreclosures in twenty-three states – and note, by the way, that Ally is the mutant offspring of the bailed-out General Motors Acceptance Corporation (GMAC), which also spawned the infamous DiTech Mortgage finance company (remember those non-stop TV commercials a few years back) which specialized in jumbo NINJA loans (No Income No Job or Assets). A conspiracy theorist would be in nirvana with all this, but it was just plain vanilla fraud in a time when fraud was over-taking apple pie and Mom as the defining quality of our national character.
The net effect of all this is that the real estate industry in America just got a whole lot more desperate on Friday. What’s with suspending all these foreclosures? Generally it’s about the slovenly (and possibly felonious) paperwork associated with so many home loans doled out in the recent bubble years, above and beyond, you understand, the complete absence of due diligence in evaluating borrowers – but that aspect has been so well known for so long, and so blatantly ignored by the legal authorities that it has merely entered the realm of humorous American folklore like Br’er Rabbit and the Chickens – too quaint to prosecute.
This new subplot concerning the paperwork itself, however, complicates things more than anyone expected, and real suddenly. So eager were the originators to pump-and-dump mortgages – to write up loans and immediately re-sell them to the chumps at Fannie Mae, Freddie Mac and elsewhere – that they got ludicrously sloppy. Instead of mortgage applicatons being signed by notaries, the lenders just set up signature boiler rooms where unauthorized factotums signed them by the forklift-load without anyone so much as glancing at the pages within. Whoops….
Enter the lawyers for the foreclosees. Their mission: to either assist their clients in evading foreclosure, or at least stalling the process indefinitely, allowing said clients to occupy a property as a sort of court-sanctioned squatter possibly forever. For one thing, it’s probably cheaper to pay a lawyer a couple of thousand bucks to roll his hoop through the courts for a year than to actually fork over a $4,500 mortgage nut each month on an under-water five BR four bath vinyl-and-chipboard contemporary – with the possible bonus outcome of the house’s title becoming so hopelessly lost and unproduceable that two generations of title insurance investigators will squander their whole working lifetimes in fruitless searching… and by then, perhaps, the whole sordid, messy business will be forgotten, like an old forgotten patent suit filed decades ago by lawyers for a poor swindled nearsighted engineer, who has been pushing up daisies now in a lonely Michigan bone orchard since Alan Greenspan blew his last clarinet lick at the Five Spot.
The title insurance business will take a dim view of these monkeyshines, you may be sure, but by then they will be out of business, too. And then won’t it be fun imagining some future when every attempt to transfer property is just a shot in the dark… or else property won’t be transferred at all, at least not legally. It seems we’re developing a whole new and interesting relationship with the rule of law in this country. Increasingly, it’s become optional. And what you finally get when you opt for that is a lawless society where people simply grab what they want via the barrel of a gun and smash whatever gets in their way. Our nostalgia for the Wild West may suffer as this occurs and no one is able to live a settled secure life anymore in the USA.
This new anarchy in the troubled housing / mortgage nexus comes at a very interesting time, too: just when the public is about to elect a new national legislature full of characters with a very squishy idea of the rule of law. Many of them conflate it with the theocratic rule of Jesus. Maybe Baptist ministers and snake handlers will start showing up in the probate courts to sort these matters out. America is increasingly looking like the saloon in one of the earlier installments of Star Wars, where the most improbable creatures mingle and frequently bust up the place for no apparent reason other than they felt like it.
Coming back to Earth though, one can only see more Big Trouble ahead for the Big Banks in all this mortgage hugger-mugger, and of course the country as a whole. Sooner or later, somebody with a badge is going to demand to look inside their vaults and examine the paper they are hiding in there. And when that day comes, the truth will be revealed about the greatest self-swindling of any nation in the long, groaning history of the world. Nobody among the community of other nations will want to do anymore business with us – including the sale of any oil, and won’t that be a funky day?