In what can only be described as a slap to the face of victims of the housing crisis and an insult to even the vaguest notion of the rule of law, the banks responsible for the mortgage meltdown and subsequent financial crisis and recession have once again escaped justice. After criminal cases were dropped despite massive evidence the civil cases are now settled with regulators and its a slam dunk for the banks. Total victory

Over the last several months, analysts have become invested in the narrative of a recovery in housing, hyping positive data and downplaying either negative data or the explanations that temper the good news (the large amounts of uncounted shadow inventory, for example). This pervasive talk feels a lot like the bubble years, only we’re now talking about how the bottom for housing has been reached instead of marveling that prices will never go down again. And it’s led to a pernicious outcome – the selling off of housing stock to large investment groups who plan to rent it out.

There’s nothing inherently wrong with that, nor is it surprising. Rich investors were always going to buy up low-end housing stock if they felt it was undervalued.

If Fannie and Freddie are guilty of misleading investors, they deserve to pay the penalty. And yet, I do sense more enthusiasm to go after these government sponsored enterprises than to go after the private banking firms which were far more responsible for subprime. This feeds a false narrative that government somehow caused the financial crisis by forcing lending to poor people. Fannie and Freddie followed the market in subprime and did not originate it.

Perhaps trying to make up for the smackdown they took at the hands of Judge Jed Rakoff, who accused them of letting big banks get off scot-free, the Securities and Exchange Commission filed civil charges against six former executives at Fannie Mae and Freddie Mac, including the CEO, accusing them of securities fraud.

The LA Times’ is running an excellent series on subprime auto loans. The first installment concerned “Buy Here Pay Here” used car dealerships, and how they hook low-income borrowers into high-interest loans, then repossess the car when the loans go bad and resell the car to the next mark. It echoes the housing mortgage scams, complete with securitization schemes.

Just the kind of man America needs in the White House.

Laws and rules are for the little people. Especially the ones without guns.

An extended metaphor: Mortgages as meat, and banks & mortgage lenders as sausage makers.

Trust me — it makes sense!

Federal Reserve Chair Ben Bernanke is appearing at this hour before the Financial Crisis Inquiry Commission, and he mainly said in opening remarks that too big to fail must be solved. He believes the new resolution authority will provide the opportunity for regulators to wind down firms without taxpayer resources exposed.

In law, a case can be dismissed two ways: one is without prejudice, which means that the plaintiff can bring a new case on the same matter up until the statute of limitations runs out; the other way, “with prejudice” means that the plaintiff can never bring that case again. Foreclosure fraud cases are beginning to to be terminated with prejudice. Booyah!