For months, groups like Occupy Our Homes
and OUR Washington
have been calling out big banks for their shady home foreclosure practices in Washington State and around the country. Today the issue will get some attention in the Olympia, as a couple of bills that are very much in line with Occupy's foreclosure critique have their hearings—including one bill that's sponsored by uber-conservative State Senator Pam Roach
(with ultra-liberal State Senator Adam Kline
What's bringing this very odd couple together, and putting them on the side of Occupy, is the simple matter of property ownership—which became not-so-simple with the advent of securitized mortgages.
Think way back to 2008 and you'll recall that Wall Street's bundling up of many mortgages into securities that were then sold, and re-sold, and hedged against, and so on... Well, that all helped build up the giant real estate bubble that burst and brought on the Great Recession that we're all still trudging through.
Part of this Great Recession involves banks now trying to foreclose on people who can't pay their mortgages, but wait: What if no one really knows who owns a particular mortgage anymore because it's been re-packaged and re-sold and securitized so many times over?
The Roach-Kline bill, SB 6199
, would make it a Class C felony
for a bank to foreclose on your home by engaging in "false swearing"—that is, claiming it's the owner of your mortgage when, in fact, it's not.
“Roach is right on this one," Kline told me this morning. "And it has a certain satisfaction—people in suits actually going to jail when they commit crimes.” (Roach's office hasn't yet made her available for an interview on this subject.)
Another bill, this one introduced Kline, would throw even more of a wrench into the big banks' foreclosure strategies, causing what he calls an "earthquake
" and protecting struggling homeowners. Known as SB 6070
, it would require all changes in ownership of a property—and its mortgage—to be recorded in the county in which the property is located.
"When the banks started slicing and dicing these mortgages that are the basis for these mortgage-backed securities, it became hazy as to who is the owner," Kline says. Banks wanting to foreclose on a property should be required to prove they're actually the ones holding the mortgage, he continued, and "the best way to do this is to make a bank show its cards—that it’s the owner of this mortgage. Not somebody else’s mortgage, not a mortgage backed security, but this mortgage.”
I'll be keeping an eye on these two efforts—getting hearings now here
—and will let you know what happens.