Editor's Note, July 25, 2012: This and other BankThink opinion columns written by Joel Sucher bearing this note, published between October 2011 and June 2012, mentioned the law firm of Stephen J. Baum, Litton Loan Servicing, or both. The columns should have disclosed that Baum's firm, working on behalf of Litton, had attempted to foreclose on the writer's property in 2009. American Banker's editors were unaware of this history at the time the columns were published.
In 2012, Mitt Romney will set the Republican agenda regarding foreclosure with his suggestion that the free market's invisible hand will restore all REOs to move-in condition – just as soon as the sheriffs can rid the houses of their pesky owners.
Democrats, supported by the pleadings of Tim Geithner and Shaun Donovan, will continue to ignore the foreclosure epidemic, hoping too that sheriffs can rid foreclosed houses of their pesky owners and simply make the problem go away.
The OCC and the Fed will do a bit of tap dancing (and sidestepping) when confronted with evidence that independent "consultants," suggested by the banks to review foreclosures under the terms of OCC and Fed consent agreements, have hired, in turn, consultants who previously worked with these same servicers.
Following in this vein, Goldman Sachs will finally release the name of the foreclosure review consultant it submitted to the New York Fed, as part of the Sept. 1 consent agreement that allowed the sale of its former subsidiary, Litton Loan, to Ocwen Financial.
Ocwen, in turn, seeking to become the industry leader in subprime servicing, will suffer a software meltdown as it attempts to merge other servicing platforms into its outsourced operations in India. (Just to be clear: I have no inside knowledge of Ocwen's systems.)
Collection agents in Ocwen's Mumbai office will demand higher pay and shorter hours (perhaps Sundays off) in return for taking on increased call volumes.
Anthony B. Sanders, professor of real estate financing at George Mason University who testified at a Senate subcommittee examining the progress of foreclosure reviews, will admit leaving off four zeroes when claiming that out of 4.5 million foreclosure actions by ten servicers, perhaps only 100 were the result of "egregious errors."
Goldman Sachs spokesman Michael Duvally will devise a clever way to respond to media questions, by firing off his own questions – "Why are you asking me about this?" "How am I supposed to know?" – finally putting to bed his long running ritual of "no comment."
Occupy Wall Street will enlist the aid and support of B, C, and D-list celebrities in numerous REO takeovers around the country. Many have already outworn their guest appearance welcomes on shows like TruTV's "World's Dumbest." Their publicists will be enthralled with a new venue for exposure. Soon, A-listers will climb on the bandwagon, with Alec Baldwin begging his publicist to find him an appropriate REO for a sit-in.
Benjamin Lawsky will ascend to national prominence, having turned two formerly moribund New York State agencies – the banking and insurance regulators – into a powerful force for consumer good as director of the re-branded New York State Department of Financial Services.