Did Scott Brown Facilitate Predatory Loans?
There's no question that we at the Slips take a particular interest in the Massachusetts Senate race. But usually we don't have much to say about it. Still, something Scott Brown said today struck me as rather significant--much more so than a lot of the things that have been covered in the media about the Senate race.
It turns out that Senator Scott Brown (R-Mass.) is a real estate attorney among other things. (Beats modeling, I guess.) Brown apparently did real estate closings and title work. His clients included local banks as well as some "mortgage companies," including some that are no longer in business, as well as Fidelity National and First American, two large real estate services companies that provide a range of services, including relating to foreclosure. Fidelity National, is also the former parent of LPS, which owned DocX, the document forgery firm featured on 60 Minutes and home of the Robosign. LPS is under a consent order with the Federal Reserve Board for its servicing activities, and DocX was criminally indicted by Missouri (and subsequently settled). Brown was doing work for Fidelity National when it still owned LPS.
It's not clear exactly what Brown was doing for these clients--title work sounds innocent and boring enough, and Brown certainly isn't responsible for all of his clients' misdeeds. But at the very least, Brown's association raises a host of questions. Who were those "mortgage companies" that he worked for? It's nice that Brown named a bunch of local banks, but I wonder what lies under the "mortgage company" label? What did Scott Brown understand about the mortgage market he was facilitating? Did he recognize that there was a bubble? (He was a town property assessor at one point, so one would think he'd notice this sort of thing.) If not, what does that say? And if so, what does that say? How many predatory loans did Scott Brown facilitate? How many of the loans where he handled the closing resulted in foreclosure? What would he say to those families that lost their homes to predatory loans?
Obviously as a legal matter, the attorney handling a real estate closing has no duty to shield people from making a bad business decision (particularly if he's representing the bank). But there's a character and ethics issue here. In the first Massachusetts Senatorial debate, Brown said that he thinks character is an issue and that it is the litmus test for being a Senator. Mere compliance with the law isn't always a passing grade on character. I'd certainly like to know more about his real estate practice before concluding that he's passed his own test.
At the very least, it looks like Scott Brown was riding the mortgage bubble, serving as a cog in the machine. We know that Senator Brown was carrying water for Wall Street when (as his singular notable Senatorial accomplishment) he weakened the Volcker Rule that was aimed at preventing federally-insured banks from engaging in risky heads-I-win/tails-taxpayer-loses trades. Was undermining the Volcker Rule just a continuation of a career carrying water for the banks?