June 2016 H OUSING N EWS R EPORT
Is the Mortgage Market Rigged? BOOK REVIEW
By Octavio Nuiry, Managing Editor
When the U.S. real estate bubble burst in 2008, it not only triggered a global recession, a stock market crash, and the collapse of Fannie Mae and Freddie Mac, but it also unleashed a torrent of 7million foreclosures nationwide, which endangered the entire financial system. The gripping story of how three Florida foreclosure victims — a cancer nurse, a car
a textile mill would fabrics.”
“All whistleblowers are a little bit crazy,” writes Dayen. “In this case, these whistleblowers, armed with only a few websites and a hunger for the truth, found that the mortgage industry fundamentally ruptured a centuries- old system of U.S. property law; that millions of documents generated to foreclose on people’s homes were phony; and that all those purchasing a mortgage in America were taking a gamble that they would be tossed onto the street with nothing, even if they made every payment and played by the rules.” The author begins this riveting saga with Epstein’s foreclosure case in Palm Beach, Florida, followed by Redman, and midway through the book the two protagonists meet via the open comment section on Neil Garfield’s anti-foreclosure blog Living Lies, where they came to the conclusion that they were being deceived by unscrupulous lenders and loan servicers, shady lawyers and the Mortgage Electronic Registration Systems, or MERS, a electronic recording system created by big banks and Fannie Mae in 1995 to side-step local recording fees. From there, the homeowners meet other housing activists, including Szymoniak, and the three amateur sleuths decide to investigate the shoddy practices at mortgage companies and take on the foreclosure industry. Epstein got her baptism in the shoddy world of foreclosure paperwork in 2009, when she tried to help a brain tumor patient keep her home. She drafted a letter challenging the foreclosure because it was unclear from court papers who owned the tumor patient’s home. The Florida judged refused to finalize the foreclosure and the woman remained in her home as the legal wrangling continued. Redman got his first taste of foreclosure fraud when he tried to help a relative who was facing foreclosure in The Great Foreclosure Machine
dealership worker and an insurance fraud attorney — uncovered the largest consumer crime in American history, is the focus of David Dayen’s new book, “Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud,” (The New Press, 2016, $27.95). “There is a rot in our democracy, rooted in a nagging mystery that has yet to be unraveled,” writes Dayen in the preface. “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.” In “Chain of Title,” Dayen introduces readers to Lisa Epstein, a nurse, Michael Redman, a car dealership worker, and Lynn Szymoniak an insurance fraud attorney, whose lives were turned upside down by “banker miscreants.” Dayen chronicles their financially and physically draining campaigns to save their homes from Florida’s illegal “foreclosure mill” law firms, “so named because they pumped out foreclosures the way
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