May 14, 2016
David Dayen’s Chain of Title, which chronicles the fight against foreclosure fraud through the eyes of three South Florida activists: Lisa Epstein, Michael Redman, and Lynn Szymoniak. The book is available for purchase on Amazon and though other retailers. Here’s Frank Portnoy’s assessment from The New York Times:
On Sept. 26, 2008, 11 days after the Lehman Brothers bankruptcy, I proposed in the opinion pages of The New York Times a straightforward alternative to Treasury Secretary Henry Paulson’s plan to bail out the banks. Instead of spending $700 billion to prop up complex side bets on subprime mortgage loans, the federal government could have simply bought the loans themselves. If the loans became more valuable, so would derivatives based on the loans. We could have helped both Main Street and Wall Street.
Government officials considered this idea but rejected it, and the journalist David Dayen’s gripping story of foreclosure fraud shows us why. The government couldn’t buy the loans for one simple, yet appalling, reason: No one could figure out who legally held them. …
Dayen skillfully narrates a slow reveal and sprinkles in some lively metaphors. Alan Greenspan “viewed regulations the way an exterminator viewed termites.” A bank pursuing foreclosure without legal signatures was “flailing away like a boxer in the dark.”
But this book is noteworthy for a more fundamental reason. A free-market system works best when people can prove they own what they think they own. Otherwise, our confidence is undermined and policy options in a crisis are limited — not to mention unfair. Banks took advantage of the fact that nobody knew who owned what. And their eagerness to cut corners precluded an idea that could have saved millions of Americans from foreclosure.