Chain of Title should be required reading in every college-level business ethics class in America. At a time when “business ethics” is an oxymoron, perhaps the current generation that adores Bernie Sanders might better understand the dangers big banking monopolies hold. David Dayen’s book, Chain of Title, unearths a system with the power and collateral to stonewall millions of homeowners from obtaining one very simple answer: Who owns my mortgage?
If you haven’t been able to wrap your head around why the federal government has failed to prosecute one banker for the foreclosure crisis there is a very simple answer that Chain of Title alludes to. The federal government has a dark secret: the trusts are empty and the falsified notes cannot be traced back to their true owners so they must be “recreated” if a default occurs. This means that the investors, the pensions and the trusts own nothing. It also means that the banks now own everything- including the U.S. federal government. It hardly matters that we have separation of powers if the bankers and elite control all three branches.
Salon contributing writer David Dayen and winner of the coveted Ida and Studs Terkel Prize, illuminates how home buyers have ended up illegally evicted from their homes as the result of dishonesty, greed, and deception at the hands of mortgage lenders, servicers, investment bankers, and unscrupulous lawyers. Dayen states that Alan Greenspan “viewed regulations the way an exterminator viewed termites.” If this is true, then the President viewed homeowners the way a sunbather views 300 million gnats at the beach.
What is truly amazing about this book is how Dayen who has never gone through foreclosure himself is able to recreate the desperation, optimism, and naiveté of homeowners fighting foreclosure while concurrently examining the systematic collapse of the economy. The insight into his three protagonists borders on the voyeuristic and compels the reader to proceed voraciously. The reader keeps rooting for the underdogs to prevail-but it never happens. Through Dayen’s expose you can literally smell the black mold on vacant houses, and feel the desperation of those who lack the tools and resources to fight back- but try with all their might to do so.
Dayen’s writing explores the possibilities for the housing crash while remaining detached from the outcome. For example, he writes, “There is a rot at the heart of our democracy, rooted in a nagging mystery that has yet to be unraveled. It gnaws at people, occupies their thoughts, leaves them searching for answers in the chill of the night. Americans want to know why no high-ranking Wall Street executive has gone to jail for the conduct that precipitated the financial crisis. The oddest thing about the predominance of the question is that everyone already assumes they know the answer. They believe that too many politicians, regulators, and law enforcement officials, bought off with campaign contributions or the promise of a future job, simply allowed banker miscreants to annihilate the law in pursuit of profit.”
Dayen’s story begins when two of the protagonists start corresponding via discussion posts on Neil Garfield’s Living Lies blog, and come to the conclusion that they are being deceived by unscrupulous loan servicers. The homeowners will eventually meet other activists along their journey including Lynn Szymoniak and decide to take on the Foreclosure Machine. The personal sacrifices they make to become activists will leave all but Szymoniak permanently altered, and uncompensated for their efforts.
The homeowners include Lisa Epstein, a cancer nurse; Michael Redman, an auto dealership employee; and Lynn Szymoniak, a lawyer who investigates insurance fraud. Dayen chronicles their almost futile and life altering battles to save their homes from illegal foreclosure while acting on behalf of millions of homeowners without voices to complain. The author begins with Epstein’s case, followed by Redman’s; one-third of the way into the narrative, the two of them meet Szymoniak, who then pool their meager resources to raise public consciousness about banks who forge, fabricate and robosign to create the appearance of standing.
Dayen profiles hundreds of other individuals, many of them crooks, cowards, or corrupt men and women, many of whom had the authority to halt the fraudulent activities but were unwilling to do anything that would undermine their position or social standing. Although the efforts of the whistle-blowers educated millions of homeowners wrongfully facing foreclosure—ultimately hundreds of thousands of houses remain empty and only now are people starting to put their lives back together with a paradigm shift- that their government doesn’t care. Dayen relates how prosecutors, judges, and the Department of Justice have caved to powerful mortgage industry donors while illegal foreclosures continue.
Whereas politicians and the banks have been indifferent that a mortgage is properly endorsed and assigned, Dayen believes that the technicalities matter and are there to protect the homeowner and investors. Without a clear chain of assignment from one entity to the next, there is no way to determine how the loan is transferred except to rely on banks who are not noted for their honesty or accurate business records.
Exposing the lies of the banks becomes a moral crusade for the three main characters and their decision to pursue justice will create an emotional smorgasbord, which Dayen meticulously reports. Chain of Title settles on the fact that the banks’ behavior not just indefensible, but criminal and duly executed with precision. This book won’t tell readers of Living Lies anything they don’t already know- but it will help the victims of foreclosure to recognize that the United States is now full of hard working Americans who were sucked into the vortex of banking greed- and who will never again believe in the rule of law or their leaders. This is a yet undiagnosed disease in the general public and the long-term repercussions are not yet known.
Dayen describes a bank pursuing foreclosure without legal signatures as “flailing away like a boxer in the dark”- and this is a feeling that also captures the feelings of many homeowners who continue to fight illegal foreclosure. Not sure where their well-funded opponent will come from next or what tactic will be used, the homeowner will flail away like a boxer in the dark hoping that some tactic will create sympathy or even due process from the court or cause the bank to retreat back to their hellish cave.
After reading this epic novel, it can’t be avoided that a free-market economy will function best when people have the ability to prove they own what they own and owe who they owe.
If we don’t return to the rule of law soon, the average American’s confidence will be undermined and alternatives will be sought. Remember, those who tired of the Federal Reserve created Bitcoin and lending isn’t so complicated to enact that a similar solution among revolutionaries will not be created. It is amazing that the greed of banks, to save a recording fee, or pass around notes like bubblegum cards could undermine an entire industry- but that is exactly what has happened. Ominously, the first housing crash has yet to be resolved and it appears that the second wave, or what we call 2008 Part II is on the horizon. David Dayen’s book will be read well into the next century- and hopefully Americans will one day say, “How could people standby and let that happen?” We won’t, but sometimes the wheels of justice take time.
CHAIN OF TITLE
How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud
By David Dayen
385 pp. The New Press.