Sina-cism: Home sweet home foreclosure

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Activism is no crime, but the illogic that some activists display in the pursuit of their causes can amount to a crime against reason.

Chris Sinacola

Chris Sinacola

That is the case with efforts by anti-foreclosure activists to upend a recent state law aimed at clearing titles to foreclosed properties.

On Nov. 25, Gov. Charlie Baker signed “An Act Clearing Titles to Foreclosed Properties.”

To understand the ruling, we have to go back to a January 2011 ruling by the state’s Supreme Judicial Court. In U.S. Bank v. Ibanez, the SJC dealt a rebuke to banks and mortgage holders foreclosing on mortgages that had been bundled and sold to Wall Street investors.

When mortgages are repackaged and sold in complex transactions, it can take registries of deeds weeks or months to catch up to and properly record the transactions, titles and true owners.

The homeowner in the SJC case, Antonio Ibanez, had objected to foreclosure proceedings on property he owned in Springfield. Ibanez’s case amounted to this: Those doing the foreclosing had not first proved they owned the property.

The SJC’s ruling addressed a number of points of mortgage law, but the message was clear: No matter how complex the transaction (or how powerful the players), you have to prove you own a property before you can foreclose on it.

But if the Ibanez case was a win for the little guys, it also created uncertainty and hardship for some homeowners whose ownership of foreclosed properties was now in doubt.

The Legislature, recognizing that further work was needed, set about fashioning a law to clear up the title process. Baker’s signature on Nov. 25 aims to do precisely that, with legislation that enjoys bipartisan support and contains ample safeguards for homeowners and mortgage holders.

But now the Massachusetts Alliance Against Predatory Lending has filed a petition with the office of Secretary of State William F. Galvin seeking to block the title law.

MAAPL, which includes activist and erstwhile gubernatorial candidate Grace Ross of Worcester, is triply wrong here. It gets the law wrong. It gets the politics wrong. It gets the economics wrong.

It could be worse than that. If MAAPL succeeds in suspending or repealing the law, it could be hurting the very people it says it’s trying to help.

First, the law. For these activists, anyone foreclosing on property is an oppressor, while anyone fighting foreclosure is a victim. But a study of the Ibanez ruling – and the dynamics of foreclosures – shows a more complex reality. We have a Legislature precisely in order to fashion policies and laws that address complex realities.

Those opposing the title law simply do not understand its purpose and why it is needed. For starters, why block a law that gives other claimants to a property three years to raise objections before the title can be fully cleared? That’s more than fair.

Second, consider the politics here. In Massachusetts, many protections exist to help people keep their homes. Everyone recognizes this, including our overwhelmingly Democratic state lawmakers. Yet they, with Republican support, and the signature of a Republican governor, saw a need to act.

In doing so, they were guided by practicality, not ideology. But it is in the DNA of activists to object to any action, never mind whether the objection makes sense.

Third, the economics. Foreclosure is vital to the efficient operation of housing markets. Without it, Americans who work hard and save for a home – including many working-class buyers – would have a harder time finding affordable properties, or be forced to wait longer for them.

Thus, MAAPL’s actions may harm working-class families, without really helping anyone.

It is true, of course, that predatory lending happens, and some homeowners lose jobs and fall behind on their mortgages. And we know all kinds of buyers prior to 2007 fell victim to the delusion that housing prices could never fall.

But so what? Housing markets have had eight years to heal, and foreclosure is part of that process. Those losing their homes today are either unable or unwilling to make their payments.

Sympathize all you like, but it does no good to keep someone in a home they can’t afford, and it’s unfair to mortgage holders – or potential new owners – to keep properties tied up in court and off the market.

This title law is government at its best. MAAPL and its allies should study the law and basic economics. Their efforts to help a few are threatening to make matters worse for everyone else.


More from Chris Sinacola:

Sina-cism: Hey Paris, we’ll always have science — on climate change, and why researchers need to open their eyes and their minds

Sina-cism: Of Antioch and Aleppo — on learning from history and finding perspective in the debate over Syrian refugees

Sina-cism: A true common core for education on high-stakes testing, curriculum standards and what really matters in education

Sina-cism: A run of the Mill situationon free speech and the vacuous nature of many modern campus protests

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