Technology and the foreclosure crisis

by Jason Davies on October 11, 2010

Technology is one of the catalysts that enabled the current mortgage crisis.  The ability to create documents quickly, rapidly, and without human interaction was a dangerous mindset, but the banking industry did just that. As a new year is just around the corner, the error of electronic submissions will continue to curse our economy for years to come.

In a perfect world, human interaction would have been the necessary factor in preventing a mortgage crisis. However, we chose to offload the task of responsibility to technology. The so called “robotic signing” of documents allowed many people to have homes they would not qualify for. Motivated by greed, and fueled by the economic factors – disaster occurred.

Did you know most mortgages were not recorded properly and many documents were lost in translation? Many banks pay to be a memory of a network that stores mortgage information called MERS. MERS stands for “Mortgage Electronic Registration Systems (“MERS”). I will not give too far into this, but there are numerous court rulings against MERS that reflect the type of practice that went on.

This past weekend, Bank of America announced it would halt foreclosure because of the robotic signatures. Imagine how technology is able to get people into trouble so easily. The ability to exchange information quickly comes at a price. Now, here we are in 2010 looking for a solution to get us back out of this debt. I wonder if technology will be a catalyst to rapidly accelerate economic growth.

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