The Case for More Government Regulation

The Journal-Sentinel published a story about a homeowner who did everything right, and yet is still being foreclosed on.

Keon Williams is on the verge of being thrown out of his house - a startling turn of events, considering that for nearly three years since refinancing in 2008, he faithfully paid his monthly mortgage and his property taxes.

....
The problem: When Williams refinanced with Wauwatosa-based Central States in 2008, cutting his 12.5% interest rate nearly in half, Central States' affiliate, Interim Funding LLC, didn't pay off the original mortgage. Battered by the housing crisis, it took the proceeds from the refinancing and paid other lenders....

While a judge stayed the foreclosure proceedings to give Mr. Williams more time to find a solution, I ask...why is this Mr. Williams' problem?  He's not the one who screwed up.  He's not the one who took the money from the refinancing and used it for something else rather than paying off the original loan.  This should be resolved entirely by the companies involved, including the title company.

Maybe if the government had stronger regulations on the lending companies, maybe if there were more standards holding people and companies accountable, this guy wouldn't be facing the loss of his home.

Update here.