Facing forclosure? Make them produce the note.

I love this story. And the fact that the idea is spreading.

We all know about people who refinanced their mortgages into ARMs that subsequently ballooned to unaffordable proportions. Now it appears that people are figuring out how to beat the lenders at their own game: "produce the note".

See, it turns out that, in order to forclose on your house, the bank that holds the note on your house must produce the original note in court. However, due to rampant securitization of mortgages, lenders and investors did a poor job of keeping up with the paperwork. Many owners of the note on your house cannot produce the original.

Yes, its a tactic and not a solution, but if it forces lenders to stop and find another solution to forclosure, all the better. I say, more power to the homeowners. When forclosure is the only tool lenders have in this economy, where forclosed homes sit vacant and lose more money for the lender and cost other homeowners more of their home value, those lenders need to be forced to devise a better tool.

(Full disclosure: As I've said before, my family experienced first-hand the predatory practices of lenders, brokers and banks who gave bad financial advice in order to get us into an untenable financial position. Thankfully, we're naturally skinflint-y Scots and trusted our guts.)

NPR covered the "produce the note" tactic today. They do make the point that, aside from the fun Robin Hood-aspect of the practice, "produce the note" tactics could stifle one investment channel in a potential housing recovery. Thankfully, the securities lawyer they interviewed for the story, Talbott Franklin, puts the emphasis in the right place:

"My big fear," Franklin says, "is that we'll get a series of decisions, based on not fully understood facts, which will prevent securitization from going forward in the future."

Franklin doesn't blame homeowners or their lawyers for bringing the challenges. He's more critical of lenders and their attorneys for not doing a better job understanding securitized mortgages and for not taking care of important legal matters before going to court to foreclose on a home.

Right on. More blame needs to be placed on a financial sector that didn't care how these investments worked as long as they were making money. Now that they're losing money, the sector need to deal with the troublesome consequences. Too bad for them.

UPDATE: If you haven't seen it, check out MSNBC's reporting on makeshift encampments ("tent cities") popping up all over the country. (TOH to Bosh56, who says "all the people who are calling the foreclosed people losers are hating and not seeing the human condition/these losers are real people".)

Is the President doing too much? WTF?

Every once in a while, I feel like sending out a reality check from the exurbs. Here's the newest idea floated by the beltway and the media: Is the President doing too much?

I can't even justify this one with an attempt at understanding. Do you know how big the Executive Branch staff is? Do you know how many people we have in Washington taking paychecks on our behalf? Dem or Repub, I think you do!

Let me state the obvious, for the record: we expect our government to walk and chew gum at the same time. We expect our leaders to be able to handle more than one thing at a time. What's that that the GOP is always saying about how we "regular Americans" can handle our checkbooks and we expect our government to do the same? Word to the GOP: we expect you to be able to multi-task a bit too.

While this may be too much for the geniuses who gave us the Iraq war, the Katrina disaster, inept drug coverage and the economic meltdown to handle, it is expected nonetheless.

Let me put it another way: I don't care what the GOP thinks. They need to prove to me that they can do anything - ANYTHING - constructive before they have any right to speak to "The American People." They also need to show that they can work with Dems on a Dem initiative before I am willing to consider a WORD from them on bipartisanship.

For far too long our government has told us that we are a nation of can't: can't do better with Katrina, can't do better against Al Qaida, can't solve the country's healthcare problems, can't hold people and institutions accountable from government officials to Wall Street firms, can't protect the nation and uphold the Constitution at the same time.

Chalk me up to one of the Americans who calls BS on all of this. Call me an idealist. Fine. But I do believe that we are a CAN do nation, capeable of marrying our motiviation with our innovation for the sake of a better society for all.

And by the way, that is NOT the definition of socialism. If you've heard it on TV, you don't know what it means. Look it up.