More On Dayen’s Book “Chain Of Title”


July 24, 2016  BYFINDSENLAW


We did a recent post on “Chain of Title.” I saw this article today and it resonated with me. I have also experienced the weird “blame the victim” vibe in courthouses.  Meanwhile, my clients were not just financially decimated, bamboozled, and betrayed, but some were literally dying.  They needed medical care they could no longer afford.  Some had family members commit suicide over losing their homes.  Some could not afford rent for their families so they had to live with friends, move their kids to different schools, and tell their kids they could not go to college.  They’d walk into court to be treated with veiled contempt, or just outright disrespect.  Meanwhile, the corporate officers of the big banks hid never even showed, just hiding behind their slick lawyers or sending some sad little administrative scapegoat with a rubber stamp and little comprehension of the real property laws they were eviscerating with their assembly lines of foreclosure notices, assignments, and eviction notices.

An excerpt from the article about Dayen’s book where he compares previous foreclosure legal procedure to the current “system” of accepting, no, rewarding misconduct:

At foreclosure (traditionally, pre-modern crisis), “You would need original promissory notes and assignments from every link in the securitization chain, along with certified testimony from each document custodian. But nobody preserved the records. Nobody tracked or verified evidence,” Dayen writes. “From a legal point of view, the chain of custody of hundreds of thousands if not millions of loans was fatally corrupted.”

Dayen reports the activists found some banks and lenders were foreclosing loans in which the institutions could not prove they had legal standing. A entire industry sprang up dedicated to document falsification — one such outfit offered a catalog, with prices, for fake notes, mortgages, securitization agreements and other papers available to lenders.

The author writes of runaway sub-prime mortgage lending to unqualified buyers, homeowners who never missed a payment foreclosed upon, the wrong properties foreclosed upon, people who did not have mortgages foreclosed upon, “rocket docket” judicial proceedings where summary judgments kicking people out of their homes were made in seconds (in one case mentioned, before the hearing).

There was the mysterious death of a witness in a criminal case against a company that routinely falsified documents on behalf of major lenders such as Bank of America; and other outrages against the land title process and ordinary citizens who should have been able to depend on it.

Instead, they were shamed out of fighting back with slurs like “deadbeat.” “Ninety-five percent of all foreclosure victims do not contest their cases,” Dayen said.

The author has noticed the most common word in readers’ reactions to the story is “appalling.”

Some big companies were made to pay a big settlement, but Dayen says that is not the end of the story.

Every day in America, somebody continues to be tossed out of their homes based on false documents,” he said. “You would assume this activity stops, but it didn’t.

“This was an epochal moment in American life. There are so many people who have been touched by this. You’re talking about the collapse of trillions of dollars of wealth.” He quotes an informed source who called the waves of foreclosures “An extinction event for the black and Latino middle class.”

The author cites a Wall Street Journal report that 9.3 million families “either went through foreclosure or surrendered their home between the peak of the housing bubble in 2006 and 2014,” he said. Dayen estimates this affected 13 to 14 million people, not a few of whom came home from work to find their belongings scattered outside their houses and the locks changed.

“Thousands of executives” went to jail following massive failures of savings and loan associations in the 1980s and 1990s, but in the foreclosure crisis, “Nobody was held accountable for it,” said Dayen.

Instead, America got a bad case of “foreclosure fatigue,” he said. “People in law enforcement, judges, they’re just tired of it. They don’t want to hear the mortgage companies are engaging in illegal activity. . . there are real people behind those decisions. (People) most powerfully affected by it, homeowners . . . they were invisible in the policy discussion.”

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