Escribì esto hace cerca de cinco años (para el Buenos Aires Herald), cuando la crisis financiera causada por la burbuja inmobiliaria y el descuido en el manejo de la seguridad jurìdica en el mercado inmobiliario (lo que algunos llamaron el "mortgage-gate") estaba en todo su esplendor. Una conversaciòn que tuve esta mañana me lleva a pensar (a temer, sobre todo pensando en mis -en nuestros- nietos) que no hemos aprendido absolutamente nada, por eso lo comparto con ustedes.
When the Financial Services Modernization Act (FSMA) — repealing the Glass–Steagall Act, which for almost seventy years had protected the US banking industry from its own folly — was passed by the US Congress at the very turn of the past century, I thought I had hit pay-dirt.
The FSMA was hailed as the key to a “globalized” world for US financial institutions. Back then, I was engaged in a persistent effort to promote the use of American real estate transactional (and financial) practices — including title insurance- abroad. The premise behind my job was, as it is in so many other cases, a very American one: “what works for us, should work for everybody else”. The CFMA validated the world-wide viability of the title insurance I was trying to sell: a little known, and arguably little needed (beyond our own borders) financial product that could hardly fit into a legal system or framework where the risks it covered were allocated, even if not fully protected, in a totally different fashion.
Bob Rubin and Larry Summers, who both served as heads of the Treasury Department under President Clinton, were credited as the brains behind the FSMA, which together with the Commodities Futures Modernization Act (the CFMA), passed in 2000, allowed US banks to do pretty much whatever they cared to do. It was an orgiastic climax to the de-regulation feast which began during President Reagan years.
This setting opened the door to the subsequent credit orgy orchestrated by Alan Greenspan, and, eventually, to the “unavoidable” socialization of the “un-foreseeable” financial losses, cooked under Tim Geithner’s recipe.
I remember that day in 1999 vividly because I should have known that what is now happening with our crumbling mortgage “market” was bound to happen. Although at the turn of the century I had already accumulated fifteen years of experience as a member of the Florida Bar, I was originally trained as a lawyer in Argentina. And over twenty five years and counting in the international title business, I have directly experienced the contrast between our way of doing things — which many held as “best practices” but are now deservedly under question — and that of countries where they resort to more sophisticated and mature methods of control, review, and supervision for real estate transactions, methods commonly used in places where the same Civil Law I studied in Argentina is in force.
These methods go from better developed and sounder recording systems than the very rudimentary public record systems we have in the US, to the assistance and guidance the parties to a real estate transaction receive from professionals called “notarios” or “escribanos” (the real notaries, that is, not the ones we call notaries stateside, and whose attestations under the parties signatures are available at ten dollars a pop at our pharmacies, together with an anti-flu vaccine).
The deficiencies in our hallowed real estate transactional system are in plain view, clearly discernible from the aforementioned contrast with other foreign practices. So, rather than engaging in the kind of finger-pointing we are presently witnessing, I believe it is high time for us to humbly begin recognizing the significance of those comparative deficiencies and, eventually — and after a big gulp of pride- seek, at the very least, a middle ground between what we thought “worked for us” and what seems to “work for everybody else”.
And the need to re-think this very narrow — though most pressing, since it affects the housing needs of many — aspect of our financial crisis also applies to the many other “innovations” that have turned the United States into a financial asylum.
We need some creativeness, a fresh team of heads and hearts. If we cannot do what we need to do because of the many vested interests that prevent us from moving ahead, our “mortgage-gate” will end up playing in theaters as “Bob & Larry & Tim and & Alan”, a nail-biting remake of the sixties movie (Bob & Carol & Ted & Alice) where everybody ended up in the same bed.
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