THE BLOG
07/26/2011 01:08 pm ET | Updated Sep 25, 2011

A Morning Cup of Crazy

My head is spinning from the news in recent days. We've had glowing reports that "it's a new day in California" because new foreclosures are declining, even as Reuters reports that "robo-signing" -- firms cranking out thousands of foreclosure documents signed by people who never read them, certifying "facts" that may well be untrue -- is back.

And the folks at Investor's Business Daily -- who never met a pro-consumer or anti-discrimination action they liked -- recently ran an article that made me feel like I'd just chugged down a big, morning cup of crazy. But I'll get to that one in a minute.

First, about those foreclosure stats. Yes, the numbers are down, and that's good. But they're only down to 2007 levels -- well into the foreclosure wave that finally crashed the whole economy the following year. And there are plenty of reasons to think this may be a temporary blip caused by a number of factors, including ongoing litigation against mortgage servicers by the 50 state attorneys general. And most evidence continues to suggest that the housing market remains in the tank, weighing down the entire economy.

Meanwhile, Reuters reports that robo-signing -- which last winter led to temporary halts to foreclosures and helped spur the attorneys general to action -- is still with us, apparently in a big way:

Reuters has found that some of the biggest U.S. banks and other 'loan servicers' continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.

With all this confusing news, leave it to Investor's Business Daily to remind us that the real problem is the Obama administration's "witch hunt" aimed at forcing the poor banks to make loans to "minorities with poor credit." One example IBD cites is a settlement the feds reached earlier this year with Citizens Bank of Michigan -- taking a single sentence about "more flexible underwriting standards" out of context and simply ignoring the reality, as described by the Justice Department attorney handling the case:

"Some people may ask were there credit-worthy applicants in the city of Detroit, the answer is absolutely yes," said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department's Civil Rights Division at a Thursday morning news conference. "Our complaint alleges that Citizens Bank effectively drew a red line around these majority African American communities in Detroit and the surrounding area."

We know that during the crash that followed the housing bubble, lending to people of color dropped far more severely than lending to whites. And we also know that during the bubble, Latinos and African Americans with outstanding credit scores -- FICO scores of 720 or higher -- were four times as likely to receive high-cost subprime loans as white borrowers with comparable scores.

And the Federal Reserve -- not known as a bunch of wild-eyed radicals bent on destroying the banking industry -- just reached a settlement with Wells Fargo because, according to the Fed, bank employees "steered potential prime borrowers into more costly subprime loans."

All is not well with housing and mortgages, but that won't stop some with ideological agendas from branding those trying to fix problems as the real villains. Maybe I just need to put more sugar in my morning cup of crazy.