What happens when you don’t put bankers in prison when they break the law

What happens, of course, is that they continue to break the law—because they got big bonuses and suffered no penalties, so of course they are doing it again—it pays to own politicos, to be able to call up Eric Holder and get him to drop a case, it’s all good. Except for the country and the people in it. often employ, then… what? Then I’d feel better

From a good article in Salon by David Dayen:

New evidence over the last month shows that servicers employ virtually the same improper techniques when foreclosing. Instead of robo-signers, they use robo-witnesses, or robo-verifiers; more on them in a moment. Regardless, they are breaking laws and degrading the integrity of the courts to kick people out of their homes, a sad and enduring legacy of the destruction of the nation’s property system during the housing bubble years.

In 22 U.S. states, lenders must file foreclosure complaints with a court, and prove the facts of the case before a judge. But servicers have shown themselves largely unable to perform this seemingly simple task.

During the housing bubble, mortgages were traded so rapidly, with insufficient documentation, that true ownership has been confused on millions of loans. In addition, servicers operate with such thin profit margins and bare-bones staff that they don’t have the resources to retrace the steps of the mortgages, which may have gone through eight different companies or more. So they have resorted to a number of shortcuts to evict homeowners.

When servicers got caught robo-signing, they stopped. But they trained a new set of employees, best described as robo-witnesses. These low-level personnel work for the servicer’s litigation departments, and they fly around the country from courtroom to courtroom. Reading from a script, robo-witnesses claim to have personal knowledge of their employer’s practices, and that they can swear to the legitimacy of the foreclosures. “They’re trained to parrot a script, you could just bring a parrot in,” said Lisa Epstein, a foreclosure expert now working for a defense attorney.

But these robo-witnesses know pretty much nothing beyond the script; they have no insight into the individual cases in which they’re testifying. “They walk into court having read the documents of the case a moment before,” said Thomas Ice, a foreclosure defense attorney in Palm Beach, Florida. Ice argues that it’s no different than robo-signing, just moved into the courtroom. “They don’t give their signature now, they just perjure themselves in court.”