WNYC's Bob Hennelly is an award-winning investigative journalist. While at WNYC he has reported on a wide gamut of major public policy questions ranging from immigration and homeland security to power outages and utility mergers.
Stucknation: Economic Mess Continues after Midterms
Monday, November 08, 2010 - 12:00 AM
Last Tuesday most Americans stayed home. It was a slight majority of the minority that turned out to redirect the nation's course.
Republicans bragged about winning. Democrats whined about losing. Meanwhile, more and more Americans worried about just surviving.
At the end of the week, we learned the economy added 151,000 private sector jobs last month, but the percentage of unemployed stayed steady at a disconcerting 9.6 percent. Another 83,000 people fell into the "long-term" unemployment category, which now makes up about 42 percent of the close to 15 million Americans out of work.
The Wall Street Journal calculated that at the pace of last month's job growth, it would be almost 20 years for the country to return to the 5 percent unemployment rate we had in the halcyon days before the Great Recession hit a couple of years ago.
From June 2009 to June of this year, bankruptcies rose to almost 1.6 million, 20 percent above the same period a year earlier. Business bankruptcy filings hit close to 60,000, up 8 percent from the same period a year earlier. Since 2007, both personal and business bankruptcies have more than doubled. Now they are running 6,000 a day.
September registered more than 100,000 fresh foreclosures. And then October brought the "robo mortgage" scandal that now threatens to prolong and compound the national foreclosure crisis.
For a decade MERS, the Mortgage Electronic Registration System, tracked tens of millions of mortgages from a central location in northern Virginia. As a creature of the big banks, it exponentially increased the volume of mortgages the banks could slice and dice into global circulation with cyber speed.
How? A short cut. They cut out the stop at the county courthouse to properly record the mortgages. As chronicled in The Washington Post, MERS saved banks like Bank of America and JP Morgan hundreds of millions of dollars by cutting out the legal step of seeing to it that mortgages were actually recorded in the county where the property existed. Evidently, this was legal in some states and open to challenge in others.
In some cases, lawyers were encouraged to make their quota of foreclosures by fraudulently "robo-signing" mortgage documents. Now all of the nation's 50 state Attorneys General and federal regulators are investigating yet another potential white collar crime wave implicating the nation's financial sector.
The whole MERS approach worked fine as long as the real estate bubble continued to expand. But once it burst, MERS and the banks needed sheriffs and judges from those very same county courthouses they had ignored to actually execute the foreclosures. Cyberspace still has its limits.
It is not just politics that are all local.