Americans deserve more than an apology for the foreclosure fraud epidemic

Despite talk of "recovery," former homeowners remain scarred after their government abandoned them

By David Dayen

(Credit: Reuters/John Gress)

“I lost my home of 30 years to fraudclosure.”

“I have been fighting this bank for over five years now. I am finally losing everything to their fraud.”

“We feel captive in our own home.”

This is a sampling of what I have awakened to practically every day for the past few months, since my book “Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud” came out. Hundreds of people have emailed me, sent me letters, attended my public events, to relate their personal horror stories of foreclosure and dispossession. They come from across America, from different social and economic backgrounds. Some lost everything, and some haven’t given up.

They contact me, a non-lawyer who has only written about and not participated in their struggle, because they have been abandoned, by a government that chose sides against them after the crash of 2008. They seek answers that I mostly don’t have and support I mostly cannot provide. Outside of referring them to legal aid, I cannot solve their foreclosure problems. I cannot convince a judge disinclined to rule in their favor, or a bank disinclined to see them as anything but a financial asset to be plucked, to change their minds. I can only note in sorrow that the massive netting of fraud laid by the mortgage industry over a decade ago continues to capture people like them.

But despite my lack of assistance, they typically express to me their gratitude, for one simple reason: just by giving voice to similar nightmares, I have instilled in them hope that they aren’t utterly alone in their misery, that they haven’t been singled out by a vengeful nation, that somewhere out there they have an ally and a confidant.

I wrote my book for them, for everyone who suffered as a result of the largest consumer fraud in American history and the greatest economic collapse in nearly a century. They shouldn’t be forgotten. In fact, somebody should apologize to them for having to bear the weight of the financial collapse on their shoulders, even while that suffering was exacted through outright fraud. It might as well be me.

In “Chain of Title”, I detailed how three foreclosure victims uncovered an unparalleled pattern of deceit: mortgage companies systematically using false evidence in courtrooms and county offices to take people’s homes away. This routine document fabrication covered up the unspeakable crime of breaking the chain of title on millions of home mortgages, confusing the underlying ownership and damaging 350 years of functioning property records law.

It was a work of history, depicting events mainly in 2009 and 2010. But that history lives on in my email inbox, to this very day.

Julian Soncco of Phoenix, Arizona, told me how his bank, GMAC Mortgage, broke into his home and changed the locks while he was supposed to be under bankruptcy protection. He received a favorable judgment on two occasions but has still never recovered his home. “In this country,” Soncco wrote, “no such person, no matter how much power they hold, should have the right to take or rob a family from their home without any just reason.”

Michael Powell of Albuquerque, New Mexico, said he survived two foreclosure cases over the past five years, with a third attempt possible. “People would look at me like I was crazy when I’d talk of bogus documents and robo-signing,” he wrote. Diane Bauman of Baldwin, New York, described a foreclosure case against her by JPMorgan Chase going on six years, where affidavits suddenly turned up in the last month, purporting to fix defective documents.

Kim Bolin of St. Louis, Missouri, was told to stop making payments while she negotiated a modification, and then was put into foreclosure simultaneously. The lender submitted as proof of ownership an assignment dated 2013 from the original lender Intervale Mortgage, which went out of business in 2008. Kim, her husband and her three kids expect to be out on the street in the next two weeks. “The feeling of failing your kids is unbelievable,” Bolin wrote. “I now have a heart condition that is causing rapid breathing and a rapid heart rate – the only reason they can find is the huge amount of stress I’m living with every day.”

It’s impossible to expend the time and resources necessary to verify these and the hundreds of other stories I get daily. I can’t even get through all the names of these victims. But I can paint a picture of the type of people who write them, which is nothing like the one the industry frames, a tale of deadbeats and losers who miss mortgage payments and try to scam banks into acquiring a free house.

These people are meticulous. They’ve kept every scrap of paper related to their cases, probably to preserve their own sanity. They know how the law works. Their perseverance, even while recognizing the odds against them, is remarkable.

Andy Williams drove four hours from Chicago to St. Louis to see me speak last month. His foreclosure case began eleven years ago, and he’s compiled a half-dozen law firms to help borrowers in foreclosure in the Chicago area. His lonely battle for consumer rights occurred in parallel with the subjects of my book, thousands of miles away in Florida. There was no wide-ranging community to bring all these voices together, nobody to tell them they weren’t alone.

Which I guess made me the conduit. So I hear all these stories, knowing that years after the foreclosure crisis began, judges and lawyers and prosecutors and politicians don’t want to hear them anymore. Any drive to protect the public, if it was ever there, has withered. Having exhausted other options, foreclosure victims have to approach a writer as a last line of defense. It powerfully illustrates the dislocation people feel, of being stuck in a Kafka-esque trauma without resolution.

Political analysts still manage to wonder why people are angry in a time of economic recovery, without ever even hinting recognition of the scarring impact of the foreclosure disaster. More than 9.3 million American families gave up their home between 2006 and 2014, either in a foreclosure or a short sale or some other transaction. That translates to about 14 million people, all of whom have family and friends and colleagues who at least know of the pain caused by the foreclosure crisis. 

There have been more since then.

It didn’t have to turn out that way. All of the losses didn’t have to be placed upon homeowners. Somebody could have been held responsible. We could have enforced the simple rule that you can’t take a person’s home with false evidence. This bare minimum would have engendered some faith that the system works, that justice still burns somewhere in America.

So to those who have reached out to me, and those who haven’t, to everyone still feeling the pain of foreclosure, I have just one thing to say. Your government failed you. Those entrusted with protecting you failed you. And when in your desperation you turned to me, I failed you. Because I wish I had something better to express than an apology.

POSTSCRIPT: This is my last column for Salon as a contributing writer. I am tremendously thankful to everyone I worked with here for their encouragement and support, and I exit with the best wishes that this incredible operation will thrive in the future. Thanks.

David Dayen is a contributing writer for Salon. His first book, "Chain of Title," is out now. Follow him on Twitter at @ddayen.

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