NEW YORK (TheStreet) -- Foreclosure delays implemented by big lenders, demanded by politicians and spurred on by the plaintiffs' bar could have a devastating effect on the housing market if dragged out over the next several months. In the realm of politics, lawmakers and attorneys general have taken a tough stand against banks' practice of "robosigning" foreclosure documents. In an effort to cast themselves as the new "sheriffs of Wall Street," politicians have issued a flurry of anti-bank statements ahead of a highly partisan election battle next month. "In the midst of a $700 billion Wall Street bailout, Congress still has no answers for struggling homeowners," said Michigan state Sen. Hansen Clarke, a Democrat running for Congress. "Michigan should take this opportunity to set a positive example for our nation by freezing foreclosures for two years, allowing people to stay in their homes and make reduced payments until they get back on their feet." http://www.thestreet.com/story/10889321/1/the-worst-case-foreclosure-scenario.html Ouch.
These are all the slow and painful side effects from the 2008 bailouts. Had the govt not intervened these banks and their bad paper would have been exposed / cleaned up and settled for 10 cents on the dollar during their bankruptcy proceedings. Instead we will be dealing with these issues for the next 10 - 20 years. Free markets only works when free from manipulation. All bets are off now, no paper is immune from fraud claims.