Foreclosure scandal a 'horrible snapshot' of economic crisis

Attorney General Eric Holder said on Wednesday a startling number of foreclosures are under investigation, as three large financial firms halt foreclosures in 23 states after bank officials for two of them, Bank of America and JPMorganChase, admitted under oath information in the pursuit of foreclosures wasn't verified as legally required. Annie Lowery of the Washington Independent reports the third, Ally Financial, had submitted perjerious affidavits to foreclose on homes.

Brett Arends of MarketWatch.com says the scandal demonstrates a number of points, most notably, that families with mortgages need to protect themselves against the mortgage industry because, in Arends' words, "You can’t trust the banks to protect your interests," not when the industry continually displays a willingness to hold the legal jargon of mortgages against consumers while treating the legal jargon that applies to it and its practices as inconsequential.

Also, that the economic crisis is a long ways from over. Arends maintains trends like this in the real economy - what he describes as a "horrible snapshot" - are a better indicator of economic health than the stock market's performance.