The Foreclosure Crises and Our Legal Infrastructure

The redoubtable Gretchen Morgenson has an interesting piece in this morning’s New York Times, ‘Flawed Paperwork Aggravates a Foreclosure Crisis’.

She and others have reported on what appear to be systematic filings of flawed – perhaps even fraudulent – documents by companies (via their lawyers) claiming a right to foreclose on unsatisfied mortgages.  This story appears on p. 1 of today’s Times. By definition, that signals its importance though, for once, Morgenson adds only details to a well-publicized tale. 

Morgenson focuses on filings. What she doesn’t write about here is why few courts have picked up on the problem which extends to at least 23 states.

Some writers, especially on the internet, have noted the problems in Florida with courts or specific judges dedicated to clearing foreclosure cases. No discussion of the foreclosure crises (yes, plural) is complete without tying in the courts’ role.

For a generation state and federal courts have been understaffed and underresourced, and virtually everyone in the court system has been underpaid. Put in the active voice where the last sentence belongs, we taxpayers have understaffed, underresourced and underpaid….

Like all failures to invest in infrastructure, this one has had consequences both in the present and for the long term. One now is crowded dockets, something the foreclosure tsunamis (yes, plural again) have worsened.

Courts told to clear their calendars of certain types of cases will do so using ‘rocket dockets’ and other means. This imperative makes worse judges’ prejudice in favor litigants who don’t cause them problems. Criminal defendants making Miranda claims or defaulting homeowners challenging foreclosure documents face less than sympathetic judges.

It is important to recognize the connection here.

When the Supreme Court pushes finality in criminal judgments regardless of procedural niceties and inconvenient truths, the implications extend well beyond the notorious cases of the condemned and even criminal law generally. It affects all processes – especially debt collection, foreclosure and drug-law forfeitures – in which the defendant is usually ‘guilty’.

The complicity of the courts in batch processings is corrosive and corrupting — both long lasting in their effects. That the ultimate, if largely unacknowledged, responsibility lies with the public, not ‘the system’ mitigates not at all.

Our potholed roads, weakened bridges and lack of transportation planning remind drivers daily of the need for repairs to our physical infrastructure.  Our legal infrastructure, the foreclosure crises reveal, is in every bit as sorry a state.