Lending on full automatic

Opinion: October 28, 2010 at 12:00a.m.

Seattle Times: Sloppy, greedy mortgage lenders helped inflate the housing bubble of the Great Recession, now the Federal Reserve is investigating to see if the same avaricious instincts are being applied to home foreclosures.

All of this belated attention by federal banking regulators is too late for taxpayers covering the losses of mortgage-backed gambling by Wall Street.

At the heart of the review announced recently by Federal Reserve Chairman Ben Bernanke are the paperwork and procedures of a volume industry moving product. In one mode, the mortgage giants were cranking out dubious loans; now in retreat, they are processing foreclosures on full automatic.

It is more corner-cutting by lenders with potentially disastrous consequences for consumers who do not know all the rules and safeguards as well as the financial pros — who cannot be bothered with the basics, such as reading the paperwork.

A mess

One has to wonder where the title-insurance business is in all this mess. Who indeed are the guarantors of clean titles? Sloppy foreclosure practices, and the toxic legacy of casual record-keeping, has to distress anyone looking to buy a distressed property.