The latest incident in the home mortgage crisis sounds like the return of vigilante justice à la Hollywood.
Recently, a California couple tied up and tortured a pair of loan modification agents they had hired to help save their home from foreclosure. The couple, whose home is in foreclosure, kidnapped and beat the loan agents after suspecting fraud. Evidently, this all took place in front of three spectators with business ties to the loan agents. (Will we see it on You Tube?)
But the threat of violence from foreclosures is all too real. Suicides, person-on-person violence, such as murders and domestic violence, as well as property crimes in neighborhoods with abandoned homes are reported on a regular basis.
With foreclosure filings still at record highs despite a 4% decrease for last month, the data suggests that more violence may be forthcoming.
If mortgage fraud incites violence, what about investment fraud? When Jeffrey Picower was found dead last week, the country waited to hear if there was foul play. No such luck, as many may have thought. The cause of death was confirmed, drowning after heart attack, but doubts linger, wishful thinking perhaps. It’s difficult to be fair to those who profit from fraud when so many have lost so much and vengeful thinking feels more empowering.
So in this painful economic environment, it may make sense to keep the recipients of obscene bonuses at bailout firms confidential.
Otherwise, AIG and other prominent executives living on stately Long Island or in sail-friendly Connecticut could face more activism and protests, or worse. (No surprise that the AIG executives who promised to return their bonuses last March have yet to return the money.)
As for our California couple, they are free on a $1 million bond and could face a maximum sentence of life in prison.
Will the punishment fit the crime? Bernie Madoff and his $50 billion scam of the century got only 150 years in prison. In the most rudimentary of calculations, that’s a lifetime-and-a-half. Relatively speaking, Bernie made out like a bandit.
In these times of economic woe, it may be wise to consider that volatility does not just apply to adverse events in capital markets. It may also serve to continue writing the history of violence.
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