market-ticker.org / By Karl Denninger / January 9, 2013, 13:51
There comes a point where cheerleading for crooks has reached the level of the absurd.
One reason for optimism in the New Year is the housing market, which continues to heal despite the weak economic recovery. Case-Shiller, Lender Processing Services and other data trackers are reporting recoveries in many regions. Even more noteworthy is that the rebound is strongest in states that let lenders enforce contracts.
We’re referring to the difference between “nonjudicial” states that have streamlined foreclosure procedures and the 23 “judicial” states that force lenders to go to court to enforce mortgage contracts. Prices are stabilizing in the former but still faltering in much of the latter, which isn’t surprising, except to politicians. Housing markets can’t clear until lenders can foreclose on delinquent borrowers and prices fall far enough to attract buyers who can afford the mortgage payments.
That’s because in judicial states, which the lenders knew were judicial states when they made the loans, they can’t generally prove up their claims in a lawful sense — so they manufacture documents they don’t have (on purpose) and then hope nobody looks too closely (or their opponent doesn’t even show up!)
The Journal goes on to “decry” that these states take longer and people can live in the house without paying. But certainly this risk was known to the lender, with superior information and experience, at the time they made the loan, yes?