Ever get the feeling you've been cheated? That's the creeping sensation Florida homeowner Lisa Epstein had as she reviewed the foreclosure case against her. She'd never dealt with the financial institutions taking her to court and their paperwork didn't seem to be in order.
Most of the millions of Americans foreclosed upon when the housing bubble burst didn't fight back. But some actually read the inscrutable documents sent by financial institutions. These people pushed back, and in the process revealed the systemic fraud at the heart of the foreclosure crisis.
Financial journalist David Dayen, a Philadelphia native, details their story in his book, Chain of Title, which unfolds with the readability of a mystery novel. As his citizen detectives pick apart the machinations of their Goliathlike opponents, they discover that the financiers were too greedy and clever for their own good.
With America's bubble-year mortgages packed into extremely complicated financial products, their actual ownership was obscure. So when it came time to foreclose, it was impossible to prove who owned the mortgages that had been sliced and diced during the financial orgy of the bubble years. In the end, many foreclosure actions were backed by falsified records and rendered illegal. Chain of Title documents how Dayen's heroes discover the lenders' shenanigans. The result is both enraging and enlightening.
Chain of Title's main characters win their cases and even win a de facto moratorium on foreclosures in 2010, followed by nationwide settlements in 2012. The book doesn't have a happy ending, though. The federal government refused to vigorously punish the institutions at the heart of the crisis, allowing illegal foreclosures on bubble-era mortgages to begin again. Today there are still people receiving illegal foreclosure notices, and they may not know they can fight back.
When asked how to prevent future incidents, Dayen, who is in Philadelphia to cover the Democratic National Convention, says we simply need political leaders who believe in the equality of accountability.
"We can support representatives who are willing to have the courage to convict people who do wrong no matter who they are," Dayen says. "That's the most elemental part of this."
Dayen will be speaking at the Penn Book Center, 130 S. 34th St., at 2 p.m. Saturday.