May 26, 2016
Mildred Obi marched with Dr. Martin Luther King, Jr. when she was 16; I met her in Atlanta a little over a year ago, April 15, 2015, standing outside of a McDonald's overrun with striking fast-food workers who were chanting “We shut it down!” after successfully getting the management of the store to lock its doors.
I was in Atlanta reporting on Occupy Our Homes for my upcoming book, and Obi told me her story as we walked alongside the "Fight for $15" march. After having to leave the workforce due to a disability, she had trouble paying her mortgage and tried to get her bank to work with her so that she could stay in her house. But nothing worked, and she was foreclosed upon in 2009, as the collapse of the housing bubble ramped up foreclosures. She reached out to her bank, or what she thought was her bank—her original mortgage was with notorious lender Countrywide, which was swallowed up after the financial crisis by Bank of America. But somewhere in there, she realized, U.S. Bank also had some sort of claim on her mortgage.
“It's just a maze,” she told me. “You really don't know who to go after if you're really fighting. And then I couldn't afford an attorney, so I would sit up at night—I have a visual impairment—researching, going to law libraries, researching.”
What Obi was struggling with is the subject of journalist David Dayen's excellent new book, Chain of Title: How Three Ordinary Americans Uncovered Wall Street's Great Foreclosure Fraud. The term “chain of title” refers to the process by which ownership of a home is verified—a seller must have proof that they own the house in order to sell it, of course, but after the invention of the mortgage-backed security, the process got more complicated. The original lender would then sell the mortgage to another entity, usually a bank, that then pooled it into a security, which required, in order to get a significant tax break, the loans being placed into a trust. The trust required yet another financial institution as trustee (U.S. Bank was the trustee, Obi said, for her loan), and the trustee then hired yet another entity to service the loan.
All of this sounds incredibly complicated, and it is. It was so complicated, in fact, that the banks often didn't bother to keep up with their obligation to actually legally pass along the title to a home properly. When they wanted to foreclose, then, they'd simply create the documents that they didn't have. Dayen's book explains all of this through the stories of three homeowners, Lisa Epstein, Michael Redman, and Lynn Szymoniak, whose battle to expose the fact that the banks were often foreclosing on homes that they had absolutely no legal right to reads like a fast-paced thriller, dramatizing incredibly complicated financial and legal information in such a way as to make it unforgettable.
The term “robosigning” is used to describe a process that is much more than just signing documents. Indeed, as Dayen notes, some attorneys thought the term “softened the crime, made it sound like an automated labor-saving device instead of an improper process.” Even I had heard it—and used it—many times but when I followed Epstein, a cancer nurse turned foreclosure expert, as she discovered name after name repeated on document after document, as her work led to depositions of the “robosigners” that revealed that they were low-level employees who signed hundreds and even thousands of documents a week, I felt the impact, the magnitude of the crime sinking into my chest.
Each of those documents was a foreclosure, a home out of which a family would be thrown if the bank got its way. Over and over, borrowers like Epstein and Mildred Obi would try to figure out who actually owned the mortgage on their home, who actually had the ability to foreclose on them. And it turned out that the banks didn't even know—and that, since they didn't know, they'd make it up after the fact. In some cases, that meant they foreclosed on homes that weren't delinquent, homes that the owner had paid off already. There was almost no punishment for this, and what punishment did occur, in the form of “settlements,” was a slap on the wrist. A $300 check for having been approved for a loan modification and then illegally losing your home was certainly no compensation. It was an insult.
The help Obi looked for from her lender, her mortgage servicer, the courts, and even entities that exist to help seniors or low-income people she eventually got from Occupy Our Homes Atlanta, who risked arrest alongside her to move her back into the home she'd been evicted from, and eventually won her her house back, free and clear. The housing justice movement that sprang up in the wake of the foreclosure crisis couldn't hope to defend each and every foreclosure victim—there are, Dayen notes, no reliable numbers for how many families lost a home during the crisis, but the best estimates are nearly six million.
The foreclosure crisis did not hit everyone equally. Older Black women like Obi had been targets of subprime lenders, who Dayen notes would turn up promising refinance loans to “make their financial hardships disappear,” loans that would turn out to have obscenely predatory terms. Dayen calls it “redlining in reverse.” Women, even when controlling for credit score, income, and wealth, are some 30 percent more likely to have a risky loan; single Black women are over 250 times more likely than a similar White man.
Women took leadership roles in the housing justice movement, too, and there they used the caring skills that women are expected to have (and for which they are so rarely compensated). Dayen begins his book with Lisa Epstein's story, as the nurse found herself in foreclosure and took it upon herself to fight not just for her own house, but for others, too. She compared her unpaid work investigating foreclosure fraud, Dayen writes, to “providing triage to those suffering from foreclosure.”
And people suffering from foreclosure needed it. “Being in foreclosure,” Dayen writes, “took a physical toll on homeowners, a daily puncturing of their already-reduced self-esteem. Activists heard constantly about stress-induced illnesses, heart problems, depression.” Mildred Obi told me that the fight exacerbated her symptoms physically and mentally, but that she was committed to the fight for others as well as for herself. “I'm a retired nurse,” she said, “so I'm a caregiver.”
Perhaps the thing that those in foreclosure needed the most help with was overcoming shame. The public, the politicians, the banks, and even the judges in foreclosure court treated foreclosure victims as though they were at fault, as though they were bad people who deserved to lose their homes—the argument the banks' lawyers tended to make in response to the fact that their documents were fraudulent was simply that people didn't pay their mortgages, so what did it matter if the documents were fake? Just asking for help meant admitting that you were in foreclosure and was loaded with stigma; for people to get beyond that point and get angry usually took something special.
Lisa Epstein found that in the comment sections of foreclosure blogs—and eventually, she started her own, where she built an online community that helped people move past their shame and fear and take action. In Occupy Our Homes and similar groups, just getting people sharing stories and realizing that many others were in the same boat could move people to action.
The home remains, despite the best efforts of many feminists, a gendered space to which women are supposed to have a particular attachment. But for most people, regardless of gender, home is supposed to be a safe place, a sanctuary. For that space to become politicized, the site of struggle not over who was going to do the housework but between banks and everyone else, was a powerful experience. Cat Salonek of Occupy Homes Minnesota told me stories of moms making casseroles and passing them through the windows of an occupied house, of explaining to people who visited occupied homes that they were risking arrest by being there and asking them to consider what it meant that their tax dollars might pay for sheriffs to remove a family from their home.
But it turned out that moving from shame to anger and action was not, ultimately, enough to stop what Dayen calls “the Great Foreclosure Machine.” Shabnam Bashiri of Occupy Our Homes Atlanta told me, “The housing justice movement was one of the most wonderful, beautiful things, and at the end of the day what's more important than your house, having a roof over your head? We had so many little victories but on a grand scale, they got away with it.”
But the foreclosure fraud and housing justice movements uncovered predatory practice after predatory practice, forced the stories into the news, forced at least some acknowledgment from elected officials, and they have helped keep the anger alive, fueling demands for change that echo throughout this election season. Pundits, especially, who worry in hand-wringing thinkpieces why so many Americans feel that the system is rigged against them, ought to read Chain of Title and recall that millions of people, in fact, have very good reason to be angry.