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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.

When lawyers control the foreclosure conversation

March 22, 2011

It must have seemed like a brilliant idea, in the beginning. When life isn’t the way you want it to be and your elected officials can’t hear you over the voices of those with more money to contribute, take your case to the courts, plead your case for justice before those who only exist to check the power of the state and balance the needs of the people against the rule of law.

Judges were respected just like rulers, back then. In fact, the first Chief Justice of the United States, John Jay, was the president of the Continental Congress of the United States from 1778 to 1779.

You may recall Jay from his work on the Federalist Papers with Alex Hamilton and Jim Madison. No? Well, it was a long time ago.

This was back when government spoke through statesmen, revolutionaries, diplomats and founding fathers. Today, government speaks mainly through attorneys and bureaucrats. When a politician speaks, you can be sure some attorney somewhere has pre-approved the remarks.

It’s the same with our publicly traded corporations and our entire medical industry. Say the wrong thing, lead someone to believe that they might make a good return or recover from cancer when the opposite occurs and prepare for a legal battle. In a world as complex as ours, there will always be those who feel life didn’t go their way. Our system makes it possible for them to take their case to the courts.

Alas, today, they are not likely to appear before a statesmen or a diplomat. They are very unlikely to have a revolutionary for a judge. Today, they will most likely appear before an attorney. If the case is important enough, they most surely will, as federal judges and judges in the appellate courts all have law degrees. Some lower court judges do not.

The problem I have with attorneys getting involved in every important decision that gets made in this country is one of scope. Attorneys are trained on the details. By choosing which details to focus upon, they can guide the conversation into a corner. They can lead a judge, for instance, to want to throw out a foreclosure proceeding against a borrower who hasn’t made a payment in two years because the signature on a particular document doesn’t meet a certain set of requirements.

I have to believe that a statesman would look at these cases differently.

With millions of Americans bringing their cases before thousands of U.S. courts each year, we’ve refocused the concept of American justice. Instead of a macro-scaled check and balance (as with the other two branches of government), the judiciary turned into a microscope wielding monster tasked with ensuring justice for each individual.

And now even justice is getting micromanaged. In order for justice to be served, individual rulings are rendered given the unique set of circumstances that existed at the time of the alleged infraction and made it into the arguments presented to the court.

Is it unjust that mortgage lenders cut corners to move borrowers who weren’t paying their mortgages more quickly into the foreclosure pipeline? Was it unjust that the same lenders used the same tricks to refinance more borrowers into lower interest rate loans during the historic refinance boom? Is it unjust that all mortgage brokers are lumped into the “criminal” category when some clearly are good people earning an honest wage? Is it unjust that some brokers feel offended when I point out that the vast majority of them were complicit in the acts that led to the financial crash?

I don’t know the answers to these questions. But I’ll bet you every penny I get paid for this column that any attorney you ask will give you an answer. They know justice. It’s their business.

Still, I worry when I hear attorneys going on too loudly about justice in their work. Of course, I don’t believe their work is about anything other than money any more than I believe mortgage brokers (or bankers or investors) got into our business for anything other than the money. And I have no problem with that. But unlike loan originators, attorneys have a venue made especially for them where they can stand up and address the court and possibly a jury of the defendant’s peers.

Protected by a fence and gate to keep the commoners out, lawyers can clutch their breasts and orate on the evils of foreclosure, the vile vulgarity of the mortgage broker and the benefits of a world where everything is first surveyed and approved by the attorneys for the government. This, they will tell you, if they haven’t already, is the only way to ensure justice for all.

That takes me back, too, to the first half of the 16th century and the reign of Ferdinand I, the Spanish born Holy Roman Emperor, who reportedly said, “Let justice be done, though the world perish.”

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