As Supreme Court Justice Antonin Scalia might have asked, what’s next? Will the Council tell Starbucks to move some of its stores a little to the east, or north? Will the Council set a limit on the number of greengrocers in the neighborhood?

And why stop at the Upper West Side? Why not regulate for the entire city? Surely the Upper West Side is not so special, not so—dare one say it—elite that it is the only neighborhood deserving of special protections against banks, coffee shops, greengrocers, fast-food joints and other such grievous assaults on urban life.

Whether or not we are headed down such a slippery slope remains to be seen. For the moment, however, the Upper West Side has been saved from the devastation that follows the opening of banks in otherwise healthy neighborhoods. Who said the City Council is good for nothing?

According to a zoning change that the Council recently approved, street-level storefronts in general will be limited to 40 feet in width on the Upper West Side. Banks, however, will be allowed just 25 feet. The measure came about after the local community board complained about the proliferation of banks in the neighborhood.

Residents have only themselves to blame, of course. Had they kept their money under their mattresses, banks would have had no reason to invade the neighborhood. Instead, residents apparently chose the security of FDIC-insured accounts, and, voilà, through the miracle of supply and demand, bank storefronts appeared on Amsterdam Avenue, Columbus Avenue and Broadway, spoiling the neighborhood’s rustic charm.

Mayor Bloomberg’s initial skepticism of the zoning change has given way to approval, which is unfortunate. The mayor generally is an advocate for common sense in matters of private property rights, but on this occasion, planning commissioner Amanda Burden apparently persuaded him that banks truly were a blight that had to be legislated away.

This silly and discriminatory zoning change is a lawsuit waiting to happen. The New York Bankers Association has taken a “wait and see” attitude, but that shouldn’t last very long. The group has every right to take this case to the courts. With any luck, a judge will ask defense counsel, “what’s next?”

That will put an end to this misbegotten regulation.

By collecting on a woman with Stage 4 Breast Cancer, which is going to be all over every local North Carolina news broadcast by the end of tonight, and every national news outlet tomorrow. After all, when has any story about a bank that's started off like this...

To say that Kirk Davis loves his wife Cindi just doesn’t quite cut it. Married for 19 years, Kirk and Cindi are in it together, for better for worse.

...ever—ever—ended well for the bank? And oh, does this WCNC report get better (and worse):

But cancer is just one of their fights. Kirk and Cindi Davis are also fighting to keep their home. In and out of foreclosure since 2008, Wells Fargo is telling Kirk and Cindi they have to pay $873 a month to stay. "They want us to make a house payment of almost $900 a month. We can afford maybe half that. I pay $1,100 a month in prescription medications," Cindi said.

Before we get to Wells Fargo's response, here's the last sentence of the report:

"If it does hit the brain, there's nothing we can do," cried Cindi's husband, Kirk.

"And by 'nothing we can do' he means 'nothing we can do (to pay your loans off, because we're dead)'" some middle manager at some point explained to some well-to-do collections agent below him, who, let's face it, got better job perks at The Gap only thee months ago.

Naturally, Wells Fargo response to this is standard "we can't disclose individuals' etc" boilerplate flackspeak:

"We understand that many of our customers may face challenges beyond their mortgage payment, so we often work with local housing counselors and other non profits that can help determine if any other assistance may be available. It’s important for customers to continue to work with their servicers and advise them of any changes in their situation. In assisting customers we must follow investor guidelines. These guidelines determine the kind and amount of assistance a borrower may receive. We work hard to help our customers maintain homeownership and view foreclosure as a last resort."

Which, again, instills confidence in their collecting ability. Humanity? Meh.

fkamer@observer.com | @weareyourfek

Mr. Schneiderman’s position is admirable. If he believes the settlement is not in the best interests of New York consumers, he should continue to resist. That won’t be easy, because the attorney general’s fellow Democrats in Washington are putting pressure on his allies—just as bank officials are putting pressure on federal officials to finalize the settlement.

When politicians and special interests are eager to get a deal done quickly, consumers and taxpayers generally should be skeptical—especially on the eve of an election campaign.

Under the proposed settlement, which grew out of revelations that some banks submitted improper paperwork in foreclosure proceedings, some of the nation’s largest lenders would be asked to fund a $20 billion pool of money that would be made available to consumers who wish to modify their loans. In return, state attorneys general who are investigating these practices in their individual jurisdictions would agree not to pursue litigation.

Mr. Schneiderman and several other attorneys general are reluctant to surrender their ability to litigate—after all, litigation is what they do. As long as they are not looking to scapegoat the banks, they should continue to resist the Obama administration’s pressure to get a deal done in time for the 2012 presidential campaign.

Mr. Schneiderman is taking a principled stand. That’s rare enough these days, and something worthy of admiration.

Despite months of moratoriums and the drop in foreclosures that came with them, 2010 still saw more foreclosures than ever, CNN reports, and more than 1 million homes were repossed and 2.9 million foreclosure filings made.

Yet as The Observer has been saying for months, things are bound to get worse before they get better. The Associated Press spells this out in a dour report on the coming year's foreclosure troubles:

The bleakest year in foreclosure crisis has only just begun.

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.

mchaban@observer.com

Bringing his dim view of Congress to bear, John Carney at CNBC says that the big banks don't stand to lose much at all, because legislators will pass a bill that will forgive mortgage firms for employing "foreclosure mills" and "robosigners." With a lame-duck session coming up after the elections, it's not hard to imagine something like this happening. (We urge readers to remember that lawmakers already tried a similar move, only to have their efforts thwarted by an Obama pocket veto.)

Meanwhile, Nelson Schwartz at The New York Times asked some analysts what they thought:

• Rochdale Securities analyst Dick Bove put the short-term figure at $1.5 billion a quarter.
• Branch Hill Capital thinks Bank of America may owe investors as much as $70 billion for mortgage securities it sold the government-sponsored entities.
• Paul Miller at FBR Capital Markets pegged the bank-industry price tag somewhere between $6 billion and $10 billion.

TheStreet's Lauren LaCapra tackles the broader implications for the housing market. Potential buyers of foreclosed homes are likely to be gunshy about raising their hands at bank auctions, because it's becoming increasingly unclear that their purchase would stand up in court.

Felix Salmon of Reuters ties a nice little bow around the whole thing:

What's desperately needed here - and what isn't going to happen - is someone to come in and take ownership of the whole mess, and cobble together a roadmap for getting out of it. But that would take more political will than seems to exist in the White House. So this is going to drag on, painfully, state by state, quite possibly for years. And while it's doing so, the chances of any kind of robust economic recovery - at least outside the world of high-priced legal firms - seem slim indeed.

mtaylor@observer.com

Twitter: @mbrookstaylor

mtaylor@observer.com

Twitter: @mbrookstaylor

Here are some ways banks have cut legal corners in an effort to rush homeowners out of their houses.

First off, bank employees have signed foreclosure documents without verifying "crucial information like amounts owed by borrowers." In other words, banks have been foreclosing on some houses without confirming the outstanding loan balance -- a pretty fundamental element in the transaction.

Second, there has been some mind-boggling notarization flimflammery:

• Some documents have been notarized before the documents were prepared
• Some notarizations may have been notarized even though the notaries didn't witness the signings. As The Times notes, "The law requires" notaries to witness the actual signings.
• Some signatures on foreclosure documents appear to be forgeries -- because "a single official's name is signed in such radically different ways."

The Times points out that lenders may have cut corners because the number of delinquencies on loans has risen so dramatically, "But analysts say that the wave of defaults still does not excuse lenders' failures to meet their legal obligations before trying to remove defaulting borrowers from their homes."

That's right. Even (maybe especially?) when homeowners fall behind on their payments in dramatic numbers, it doesn't suddenly become legal to ram reams of unverified paperwork through the foreclosure process.

mtaylor@observer.com

Twitter: @mbrookstaylor

Back in June the feds broke up a ring of Russian spys living in New York and New Jersey. The papers had a field day with Anna Chapman, a spy who spent time on the NY tech scene. "She may have been a true Cold Warrior, but Anna Chapman is red-hot in the sheets," wrote the Daily News. "The flame-haired Russian hottie accused of being a deep-cover mole in the U.S. was a wild woman in the sack, her ex-hubby says."

Online photos of Kristina Svechinskaya had potential, as did her outfit at the arraignment -- calf-high boots and skin-tight jeans. Unfortunately, wrote the Daily News, "Several who were arraigned in federal court Thursday looked young and frightened, a far cry from the sexy glamour shots they posted on websites."

Daily Intel thinks Svechinskaya's name is too difficult for her to become a real breakout star like Chapman. Tech Observer would like to point out, however, that while Chapman accomplished nothing during her tenure as a spy, Svechinskaya and her cohorts managed to steal $3 million from U.S. bank accounts.

"Thanks to the new law, for the first time ever, we will have a single federal agency charged with writing the rules for all mortgages and all credit cards, regardless of whether they are issued by a federally chartered bank, a state chartered credit union, or a group of unlicensed investors," she said.

Warren also outlined her general approach to financial regulation. As Reuters' Felix Salmon points out, she's interested in outlining principles, rather than hard-and-fast rules, to foster transparent behavior among banks. The distinction is important, Salmon says: "Warren, remember, is a law professor: she knows full well that the main effect of laying down rules is to send a thousand lawyers scurrying to find ways around them. And she's surely also seen the way in which other regulators - the SEC springs to mind - become overrun by lawyers looking for people breaking rules, rather than regulators trying to ensure a clean and level playing field."

The idea is that the Protection Bureau can skirt the bureaucratic mess of trying to spot particular instances of wrongdoing and instead work to get banks be more clear about what their products do. The increased clarity would result in a market where consumers can make informed choices about what banks currently offer. A product that's bad for consumers won't last long if consumers know it's bad for them, and products that are mutually beneficial to consumers and banks will prosper.

The Pope's bank, called the Institute for Religious Works, is headed up by Ettore Gotti Tedeschi, formerly of Spain's Banco Santander. Tedeschi is also a professor of ethical finance, according to the FT. "According to sources close to the Vatican," the FT says, "one of his main mandates was to bring the bank in line with international norms and regulations on tax havens and money laundering." Institute for Religious Works general director Paolo Cipriani is also under investigation.

A papal money-laundering beef. It sounds odd, but it isn't the first time the Pope's bank has been caught up in some nasty-sounding, suspicious affairs.

Update: In addition to expressing surprise at the investigation, the Vatican said, "It is well known that the authorities of the Holy See have frequently manifested a clear desire for full transparency regarding the financial operations of the Institute for Works of Religion," in a statement sent to Bloomberg.