Dayen follows three Florida homeowners as they discover that banks have been lying about signatures. Lisa Epstein, a nurse, learns that the bank foreclosing on her, the one at the end of the securitization daisy chain, could not prove that it had legally obtained her loan. When she challenges the bank in court, its lawyers present a document dated three months after she was served with foreclosure papers — a “poorly drafted cover-up,” Dayen writes. She meets Michael Redman, a car salesman who had a similar experience, and persuades him to publish an online guide to uncovering mortgage fraud. The two of them connect with Lynn Szymoniak, a lawyer, who investigates the signatures in her own foreclosure action and finds one with a date when the signer was actually in state prison.
Exposing those lies becomes a moral crusade. The homeowners’ stories are emotional roller coasters, which Dayen meticulously reports. He and his characters find the banks’ behavior not just indefensible but criminal. Prepare to be surprised, and angry.
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.
Book Review by Frank Partnoy
http://www.nytimes.com/2016/05/15/books/review/chain-of-title-by-david-dayen.html
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