The Next Housing Shock
In the following short (14 min) segment from 60 Minutes on the next housing shock, Scott Pelley begins by calling attention to the fraud and illegality in some mortgage practices:
“If there was a question about whether we’re headed for a second housing shock, that question was settled last week with the news that home prices have fallen a sixth consecutive month. Values are down nearly to the level of the Great Recession. One thing weighing down the economy is the huge number of foreclosed houses. Many are stuck on the market for a reason you wouldn’t expect:
“Banks can’t find the ownership documents.
“It’s bizarre, but it turns out Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse. Now that banks want to evict people, they’re unwinding these exotic investments to find that often the legal documents behind the mortgages aren’t there. Caught in a legal jam of their own making, some companies appear to be resorting to forgery and phony paperwork to throw people down on their luck our of their homes.”