There are songs you can’t get out of your head …. and then there’s the very occasional blog post. Regarding the foreclosure crisis specifically “from The Honorable Elizabeth W. Magner’s recent decision busting Wells Fargo,” Lambert explains that the errors are embedded in the code:
Maybe so. Now let’s look at law and code together. Here’s an extract from The Honorable Elizabeth W. Magner’s recent decision busting Wells Fargo [PDF], In Re Jones. It starts:
In this case, Wells Fargo testified that every home mortgage loan was administered by its proprietary computer software.
That is, code. I’ve reformatted Magner’s text into a table with two columns, which can be read left to right, top to bottom.
Column A (“Code should follow law”) contains content from the world of the judical system: Testimony, evidence, orders, plans, contracts, judgements, “the record,” and last but not least, the note and the mortgage.
Column B (“Code is law”) contains content from the world of information systems: Databases, coding, online forms, software manuals, and data entry procedures set up by Wells Fargo.
Note especially the key at the bottom of the table.
Lambert has made a table matching The Law …. with …. The Code :
First, this arrangement of Magner’s text makes one possible “theory of the case” clear: The incentives for fraud — the costs, the fees, and the interest — are all coded green, and are all in column B; the world of Wells Fargo’s proprietary information system. Follow the rents. Every time Wells makes a “mistake,” Wells makes money! After mistakes were incentivized, mistakes were made! (Could Wells Fargo’s home mortgage loan administation system actually have been a profit center?) Now, it is true that this scheme — if it is a scheme — does not conform to William Blacks’ “recipe” for optimized accounting control fraud, but it’s a nice little revenue stream all the same, and it falls within Black’s definition: “Control fraud is a term that criminologists use to refer to cases in which the persons controlling a seemingly legitimate entity [here, Wells Fargo’s proprietary computer software] use it as a weapon to defraud.”
. . .
Let’s take another look at Table I. Suppose I were a bankster, or a bankster’s lawyer, and I liked the green stuff in column B and wanted to keep what I’ve taken and take more of it. I might see Magner’s decision as a sort of “one from column A, one from column B” mish-mash that prevents me from doing God’s work. So why not get rid of that Column A entirely? Why not make code, law? That’s a clean solution, since all those pesky accountability issues go away. “Incorrect amortization” would become “incorrect amortization,” “misapplication of payments,” “misapplication of payments,” and so on and so forth. After all, if I were an oligarch, that’s exactly the kind of system I would want, right? Rent extraction without accountability. And there’s… not a precedent, exactly, that’s oldthink legalese, but a prior example, and in the same industry, too: MERS. Christopher Peterson, a law professor at the University of Utah, wrote of the “wholesale transfer of mortgages to a privatized database” [code] in Harpers:
What’s happened is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording. There was no court case behind this, no statute from Congress or the state legislatures. It was accomplished in a private corporate decision. The banks just did it.
With MERS, code replaced law. Going forward, code is law.
There’s really no clear way to summarize this post. At this point we’re not even half way….
There’s more detail – more evaluation… Go Read the POST!