A massive foreclosure fraud scandal is rocking the U.S. mortgage market. Wall Street banks and their lawyers are fabricating documents, forging signatures and lying to judges -- all to exploit troubled borrowers with enormous, illegal fees, and in some cases, improperly foreclose on borrowers who haven’t missed any payments.

The fraud is so widespread that it could put some big banks out of business and even spark another financial collapse. Fortunately, things haven’t fallen apart just yet. With strong leadership from President Barack Obama and Congress, the government can help keep troubled borrowers in their homes and prevent another meltdown.

One fraud begets another

Over the past decade, Fannie Mae and Freddie Mac transformed themselves into some of the worst-run companies in recent history. But contrary to current talking points, the firms’ failings had almost nothing to do with their programs for low-income borrowers. As policymakers debate what should be done with the mortgage giants, a battle is now beginning in which the very availability of affordable housing for the middle class may be at stake.

A history of affordable housing

The same conservatives who spent the past year senselessly screaming about the U.S. budget deficit are now demanding an extension of the Bush tax cuts for the rich. The extension simply doesn’t make sense, and the policies implied are a recipe for massive job loss in the middle of the worst employment crisis in 75 years.

Deflation nation

Congress finally authorized an extension of unemployment benefits on Wednesday, providing a critical lifeline to families across the country and an absolutely essential boost to the economy.

But with the jobless rate hovering near 10 per cent, minimum measures like unemployment benefits shouldn’t be a source of controversy. Lawmakers should be debating big-picture jobs packages to get people back to work, not drips and drabs that keep a worst-case-scenario from getting unbearable.

by Zach Carter, Media Consortium Blogger

Last week, President Barack Obama released key legislation designed to fight the banking industry’s too-big-to-fail problem. But Obama’s plan doesn’t actually address too-big-to-fail at all. It reinforces a broken system in which economically dangerous companies are bailed out whenever they drive themselves to the brink of failure.

If we want the economy to support all people, we have to break up the big banks and start treating the creation of good jobs as an economic priority on par with Wall Street rescues.

The editors of The Nation break the political debate over banking into three camps:

After Ben Bernanke allowed an $8 trillion housing bubble to ravage the global economy and nearly destroy the U.S. financial system, President Barack Obama has decided he deserves another term as Chairman of the Federal Reserve. (The UpTake has video of Obama’s announcement here.) As the Fed Chair, Bernanke has more economic power than any other person on the planet. By heading the committee that sets interest rates, he can control the economy’s rate of growth or contraction; as head regulator of the largest banks, Bernanke has more influence over the rules of the economic game than anyone else.

Some, like the U.S. and Great Britain, are working together to cut carbon emissions; while others say it’s their way or the highway. Until the air clears, it will be difficult to determine which global leaders are making the most effective choices — or even what the best path to a cleaner earth will be.

I'm sure he put it more charismatically, but according to the Washington Post, that was the gist.

The president was probably reacting to a spate criticism of Democrats perceived to be dragging their feet on healthcare reform. Democracy for America released a spot calling Sen. Mary Landrieu (D-LA) a "sellout" for taking $1.6 million in campaign contributions from the healthcare industry and failing to endorse a public plan. The naming and shaming is unlikely to stop, regardless of the president's preferences. If progressives were to stop haranguing vulnerable Democrats, they'd loose their main point of leverage on healthcare reform.