I spend a lot of time personally looking at world finance, but haven’t address it much because there are others who do a better job.
However, we are at one potential (key word potential) tipping point in the system with the robo-signing scandal. We have had a few other similar tipping points (peak housing sales in August 2005, AIG, Bear Stern, Lehman, etc.) but the general practice is to stall and/or throw a ton of money at it to kick the can down the road. Because the action is so pervasive and diffuse a stall here is possible, but would require more clever (versus honest) action than has been the case of late.
The banks and other players in the securitization industry now seem to be looking to Congress to snap its fingers to make the whole problem go away, preferably with a law that relieves them of liability for their bad behavior. But any such legislative fiat would bulldoze regions of state laws on real estate and trusts, not to mention the Uniform Commercial Code. A challenge on constitutional grounds would be inevitable.
Asking for Congress’s help would also require the banks to tacitly admit that they routinely broke their own contracts and made misrepresentations to investors in their Securities and Exchange Commission filings. Would Congress dare shield them from well-deserved litigation when the banks themselves use every minor customer deviation from incomprehensible contracts as an excuse to charge a fee?
Of course the answer to that last question is: probably. More to the point would be "can they".