Bank on it

The leaders of the country's biggest lenders must have flunked Political Science 101.

When you borrow billions of dollars from taxpayers to keep your doors open amid a housing bust of epic proportions, thus infuriating the suffering public, you've invited the publicity-hungry opportunists on Capitol Hill to scrutinize your every practice.

Our bailed out banks, which are about as popular as Harry Reid and Nancy Pelosi, just can't get out of their own way. So it's no surprise that the controversy over shoddy foreclosures and improper documents, hotly pursued by state attorneys general, has found its way to Capitol Hill.

That's not just bad news for bankers. It's bad news for everyone still paying their mortgage.

Iowa Attorney General Tom Miller, appearing before the Senate Banking Committee on Tuesday, told lawmakers the country's entire system of administering home loans must be overhauled, and that mortgage companies must face stiff financial penalties for cutting corners. Senators responded by criticizing the arrogance of lenders, saying the financial industry's shortcomings go far beyond the "robo-signing" and backdating of foreclosure paperwork, which has led to foreclosure moratoriums in many states.

In rare cases, these problems have resulted in banks seizing properties from people who were either current on their mortgage or owned the home, holding no mortgage at all.

But what's lost in all this theater and posturing, and what no one in Congress is bothering to point out, is that 99.99 percent of this country's foreclosures are totally justified.

Mistakes in the process of foreclosing the properties don't change that reality -- they merely allow many people to live in their homes, mortgage-free, for months on end.

In fact, the moratoriums and political windbaggery only encourage more Americans to stop paying their mortgages. What would your household budget look like if you didn't have to pay your mortgage or rent for eight months?

The burdens of all these abuses fall on the backs of the majority of American homeowners who are still writing checks to the banks. All this serves to make borrowing even more expensive while delaying the housing recovery.

By all means, people who are current in their mortgages and are wrongly foreclosed should be compensated. But anyone who's gotten away with living mortgage-free for half a year has nothing to complain about if some number cruncher didn't read a document before signing it.