CNBC Nightly Business Report – June 8, 2016 with David Dayen on Chain of Title

CNBC Nightly Business Report – June 8, 2016 with David Dayen

I can almost hear the producers at the end saying cut him off, cut him off!


HERERA:  Though it`s been eight years since the housing crisis, the next guest some home buyers are still dealing with the fallout from dishonest mortgage lenders and banks today, and he believes that the housing crisis has led to a breakdown of social order and a lack of trust in our financial system.  He is David Dayen, journalist and he`s author of the book “Chain of Title”.

Welcome.  It`s nice to have you here, David.


HERERA:  You know, it is surprising that the wounds go so deep, on the one hand, but on the other hand, when you look at the completed and total collapse of the housing market, perhaps it should take that long to heal.

DAYEN:  Yes, perhaps.  The fact remains is that not only did we see dishonest lending at the origination stage and then dishonest securitization where the investors were defrauded and told that the loans were of good quality when they actually weren`t, but we saw dishonesty in terms of breaking the transfer process and the chain of title that goes from entity to the other, and when individuals were foreclosed on, they were done so with false documents which was a cover-up for this lack of chain of title.

And so, there was dishonesty and the fraud was layered on top of one another, and it really does engender this loss of faith in institutions.

MATHISEN:  Well, let me bore in a little bit on that.  So, you`re saying some of these people who bought houses with loans they couldn`t repay, what was faulty about the foreclosure that caused them then to lose their homes?

DAYEN:  Well, what was faulty was that the evidence that was used for the foreclosing entity to prove that they actually owned the loan and had an interest in it was faulty.  It was fabricated.  It was forged and in any other legal context if you`re using false evidence to convict somebody, the judge would throw you out of court, whether you were innocent or guilty.

And the fact remains that every day in America, to this day, somebody is
kicked out of their home based on a false document.

HERERA:  And as I understand it, you feel as though that`s part of the reason this lack of faith in institutions, it has led to sort of societal breakdown if you will, the lack of trust that goes much further than in some previous financial crisis.  Is that — is that correct?

DAYEN:  Well, I mean, I think there`s a lot of frustration, a lot of anxiety, and it gets to the lack of accountability.  The fact this is still going on today, we had settlements over this activity in 2012.  You would presume that when you settle over unlawful conduct, that the unlawful conduct stops.

And the fact that it`s gone on and continued and most people feel that there was not very much accountability for those who perpetrated the financial crisis and the associated frauds that occurred and that is — that runs deep, sort of in the American psyche.  It gets to fair play and justice and all these bedrock American values.

MATHISEN:  What responsibility do borrowers have in all of this?  A lot of people took out loans in that they had no business taking out.  I`m not saying that they weren`t sold those loans, rather than being the viewers of them.  But the fact remains, they had no business being in it.

DAYEN:  The fact remains that there are two sides to a lending contract. And just as the borrower makes a promise to pay, the lender is supposed to make a promise that they`ve underwritten the loan and seen that the borrower has the ability to pay.

And so, there`s plenty of fault to spread around in that particular process.  However, what we know and what is detailed in my book is that there was tremendous deception at the lending stage and also at the loan servicing stage.  A lot of these defaults were servicer driven where you had loans that were 2 cents short and put into default.

You had loans — you know, people getting foreclosure notices when they paid cash on their homes.  There was a serious breakdown in the system of property records law which is 150 years older than the Constitution.  When you have that breakdown, it really does have this sort of breakdown in the social order.

HERERA:  David, thank you.  We have to leave it there.  Thank you very much for joining us.


HERERA:  David Dayen, author of “Chain of Title”.




8 Responses to “CNBC Nightly Business Report – June 8, 2016 with David Dayen on Chain of Title”
  1. Sara Benson says:

    I am aware of illegal foreclosures–and they continue to happen. With rare exception, borrowers do not know their rights. What a debacle! Another under-reported and undeniable truth is the rampant foreclosures taking place across the country in condominium and homeowners associations. In some states (such as Texas), an owner can be foreclosed upon (for a few hundred dollars in unpaid assessments) in as little as 30 days–and without a mandatory court appearance. Search the name: Winona Blevins–or the word string: “Foreclosures by Homeowners’ Associations Rising as Their Financial Condition Worsens”.

  2. TC_PortPark says:

    I heard about David and his book during an interview on Sirus XM’s POTUS channel while driving yesterday. I bought the book on Kindle at the next stoplight. I poured through it last night and thus morning, finishing it in just two sittings. It is a phenomenal read and progresses like a well designed novel. I highly recommend it.

    I am an Enterprise IT Infrastructure Consultant specializing in mergers, acquisitions, divestitures, and more generally, in client technology enablement. I moved to West Palm Beach in 2010 from New York. The devastation to the community was obvious, even to an outsider. It was blatantly obvious that mountains of bad decisions, driven by profits and greed, had literally ruined thousands of lives. I wish that I had known that this was going on behind the scenes while I was living there! Heck, I was driving those streets, eating in those restaurants and drinking in those bars. By 2012, I was thoroughly disgusted by the corruption, backdoor dealing, and pervasive culture of “anything for a buck,” so I packed up my stuff and moved to Chicago, the MOST corrupt city in America, where we are working for actual money instead of nickels and dimes! 🙂 At least here, the city and residents are engaged in an unofficial armistice treaty, where the city operates mostly in good faith and the citizens tacitly turn a blind eye to the corruption and the bribes.

    Anyway, it was a truly riveting read and should probably be turned into a movie, but the fairly depressing, anti-climatic inevitability of the outcome might not play well in Hollywood. Congrats David, Lawyers, and Activists. You have truly provided me with a valuable education on this issue and have officially gained an ally.

  3. Lou says:

    Thank you Dayen! You are burrowing the holes in what is basically financial companies using our tax payer paid court system to commit widespread purgery and by doing so, corrupted and falsly biased our own judicial system against us.Burrowing big giant holes in the their fake truths. Banks and moetgage company owners and employees, can be owned, serviced by and employ drug addicts, exagerators, and sinners of all sorts. Our only mistake was putting them on a moral pedistal, which is what deregulation is and always will be. Our own regulatory system was contained through chain of command and we paid salaries for regulators, and our judicial systems to clear the path for these folks to steal and lie for a profit so large, we cannot even comprehend.

    • BOBBI SWANN says:

      Lou – Let me correct you on the the ladder of origination. Lenders and mortgage companies CANNOT employ drug addicts, etc. New regulations that went into effect over 3 years ago requires all such persons to be licensed and in that licensing is a background check and credit report check. This is mandated annually. The only ones that escaped this regulation were the banks. All those that couldn’t pass the new regulations applied for positions at the banks! So, now all the thieves are located in one place! Please don’t include mortgage brokers and loan officers in that group because they did not market, create or fund those programs derived at Wall Street. And for the most part, most of them stayed away from those programs. As a mortgage broker for 44 years I am proud of my career and the fact that I provided a service and a means for hundreds (probably more like thousands) of people to own a home and it was done using honest means and counseling. My business is 99% referral and that doesn’t happen by being dishonest!

  4. lanikk says:

    Same old, Same old, Corporate Media defense of Corporate Pirates.

  5. BOBBI SWANN says:

    Those anchors are not THAT stupid (or are they) to not know what has happened since the Financial Crisis. I believe it is correct, that he was exposing the real truth and they could not let that happen. After all, think about WHO/WHAT is financially supporting the media. Most people think it’s the advertisers….wrong! They have lines of credit….with banks. Where do you think these media outlets are funneling their monies? …Banks. Don’t think for a minute that they would allow David to brand them as “criminals” on air. Everything he said was exactly the truth but the fact remains that the ordinary citizen does not understand land title nor do they understand how the flow of ownership should be within each county records office. Why do you think each REO closing is done with a SPECIAL Warranty Deed in those states that convey with Deeds? Why do you think that certain REO sales have mandatory clauses within the deed to restrict the buyer from selling the property for a certain limited amount of time? These bankstas selling their REO’s are covering their arses. No accountability with the financial crisis and now no accountability for the broken chain of title.

  6. Alabama John says:

    The original lenders didn’t care if you could pay or not as they were going to bundle your mortgage with many others and sell them as a package. Whether you paid or not was not going to be their problem. Selling that bundle for a profit was their motivation for giving folks those loans.
    The next one also didn’t care and sold the package to another and so on until no one knew who really had your loan in what bundle. They would of made a loan to anyone they could talk into taking one and that sales pitch was well practiced just so they could have real folks signatures on those loans to be sold.
    What was happening in the real world is called GREED!!!

  7. Jo says:

    Isn’t it interesting, they always try to put all the responsibility on the borrower, never the banksters?

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