Now when we're talking about banks and property, we should also be talking about the history of common law and equity law. The distinction, relevant
to what you guys are bangin' on about (and quite rightly), comes down to the award of damages (excuse my legalese) and exclusive treatment of property
owners. Under common law (which existed for 2/300 years prior to equity), only monetary awards are granted as remedies, which pissed some folks
So here's a little simplified story that some folks might find interesting:
Back in the day, in England, common law was seen as rigorous, rather rigid and convoluted for particular types of disputes. People felt that
precedent should give way to the idea of what's fair (for all involved in the dispute), aka equity, which became based on the opinion of, later,
Chancellors. So, soon enough, after a couple of hundred years, the Crown's secretary started to resemble a court, known as the Court of Chancery. If
folks weren't happy with common law remedies, they could literally walk down the road and be heard by someone else, not bound by precedent, to get a
better deal. Over time they merged, which is why today we see some decisions that encompass remedies previously independently awarded by both equity
and common law. This is off the top of head so if anyone wants to correct me then go ahead.
Now how does this relate to the fraud of the banks / mortgage brokers? Unfortunately the contract between a home owner and a lender, under the
circumstances we find ourselves in today, is rather plain. These contracts can not be discarded under common (contract) law as they are very much
legal. Both parties to the contract knew what they were getting into. Now if equity still existed as a seperate court, forclosure victims could
toddle down the road and get a better deal, which is what I think should be available today.
The only way these lenders (banks, whatever) can be held accountable is in the deceptive way they bundled and sold assets (not to mention LIBOR,
rating agencies etc etc), which was criminal (not common), which leaves little to no hope for a remedy for those afflicted by the recent large spate
of forclosures, as those contracts were between investors and banks, not homeowners and banks. Now if we were to rely solely on common law for a
remedy, precedent (which is what common law is based on) would dictate that indeed the contracts are lawful, and the remedy sought by the rightful
owner (banks) to the property would probably be granted, which is what has been happening. The biggest shame of all this is that even though the
banks are getting way with crazy sh&t, and should be held accountable for it, legal processes under common law won't benefit homeowners (or those
threatened with forclosure), in my opinion.
Now don't get me wrong it's all the 'banks' fault, their (illegal) decisions led to a collapse, for which they should sit in a dark cell for a while,
but I'm not convinced that common law will help here. We need a new court based on fairness. For example, people are paying off loans for overvalued
(or now undervalued) property. In equity, I would imagine a judge could dictate a new set of terms that resets the terms of the mortgage, so future
principle repayments reflect current property prices, and the banks take the hit, not the collective taxpayer who actually saved these bastards in the
Some of us want the banks to be regarded as criminal, some want the banks to be more fair, some just want their homes back. At the end of the day, to
me, the most important lesson here is one of fairness. It could be retrospective fairness (bit of restitution for those afflicted by forclosure in
the past), but if anything it should be designed with the future in mind. This'll include greater regulation (legislative), greater punitive action
in the cases of fraud and a new accessible court that can alter the terms of property mortgages for us lowly folk, but perhaps not chattel mortgages.
edit on 10-1-2013 by spoogemonkey because: (no reason given)
edit on 10-1-2013 by spoogemonkey because: (no reason