The housing industry has been in an uproar for a few years now, and things are starting to come to a head. First we hear about robo-signing of foreclosures. Next all 50 states and the federal government ask banks to stop foreclosures until this practice can be evaluated; some banks do it, then decide they’re doing okay and proceed with the process.

Now there are two different things going on that are bringing the foreclosure wars to the courts in many states.

The first involves this process of robo-signing and whether banks should be penalized and most foreclosures withdrawn. That’s what’s going on in Ohio, where the attorney general, Richard Cordray, has filed suit against both GMAC and Wells Fargo for tens of thousands of invalid foreclosure papers that have been found in their investigations. They have testimony from the people who signed these papers that they never looked at any of the paperwork; how come none of these people are going to jail?

The second involves lawsuits against banks like JP Morgan and Bank of America that are foreclosing on homes where the owners were making payments they thought were legitimate, but the banks are saying they weren’t because they hadn’t fully processed loan modifications for these people, or ended up not giving them the permanent modification, only didn’t let the people know far enough in advance that there were problems. The lawsuits are both individual, state and federal against the banks, who say they were under no obligation to approve anyone, then decided to stop talking at all.

The question isn’t why the banks are fighting all of this, because they’re not all doing well financially. The question is just how stupid are the powers that be in these places anyway? How can some of these lenders own up to what they’ve done to homeowners by causing the mess that’s devalued their property and brought about all of these foreclosures, then turn around and say they have the right to foreclose because people aren’t doing what they’re supposed to do? How could the people do what they were supposed to do when the banks not only didn’t do what they were supposed to do with loan modifications, but really didn’t know what they were supposed to be doing because of the lack of good communications between the banks and the consumers? For that part, how come many of these lawyers who should have been reading the contracts these homeowners ended up signing aren’t being subpoenaed as well?

Frankly, I’m almost ready to predict that the day of the major national bank is about to end, and I’m not really depressed about it at all. Not that my bank is perfect, but they’re at least fair and upfront about the way they do business. And they haven’t been accused of any of these bad mortgage deals nor anything else nefarious.

Anyway, predictions are that as things start to escalate there will be an offer of a settlement of some kind. I don’t know how it will transpire, but I do feel I know that the banks don’t have enough money to fully take care of the mess they’ve illegally caused. After all, Bank of America just lost $7 billion.