32: The Amateur Activists Who Took On The Foreclosure Machine

Joe Weisenthal (0:06)

Hello, and welcome to another edition of the Odd Lots Podcast. I'm Joseph Weisenthal, Managing Editor at Bloomberg Markets.

Tracy Alloway (0:13)

And I'm Tracy Alloway, Executive Editor at Bloomberg Markets.

Joe Weisenthal (0:17)

So Tracy, we're gonna talk about the financial crisis and the aftermath of the crisis in today's edition. And it's a story that I think a lot of people know because they've read books like The Big Short, or they've seen the movie. And so they know all of the troubles that happened on Wall Street and everything, all the money that was lost.

But today we're gonna talk about the same story from literally, I would say, the exact opposite angle.

Tracy Alloway (0:45)

The opposite angle? What do you mean?

Joe Weisenthal (0:48)

Well, so we know, of course, what happened with all the major banks and how much money they lost and everything. But what we don't have from many of these stories is the human angle on the ground. So we know that housing crashed, and we know that all these people lost their homes and these foreclosures rippled through all these securities that Wall Street had made a fortune on. But we don't really know about these same securities from the perspective of the homeowner.

Tracy Alloway (1:19)

Ah, so this is like the epilogue to the housing crash, right? This is what happened afterwards.

Joe Weisenthal (1:24)

Yeah, I think that's exactly right. And there's also, in addition to the fact that we're going to talk about the story from a totally different angle, there's also a really interesting tech angle to this story, because as these foreclosures and the housing collapse rolled on, this was totally new territory for a lot of people. People didn't know how it was going to work, losing their homes. And so the fact that this happened at a time of blogging and the internet allowed people to learn about what was going on around them in a way that they probably couldn't have in any other era.

Tracy Alloway (2:02)

So I remember actually writing a little bit about this in 2010, I think it was, the idea that all these people who had their homes foreclosed on were sort of gathering together online to figure out how best to fight the banks or whoever they sort of owed money to. It was a really big deal at the time.

Joe Weisenthal (2:20)

Absolutely. And so today we're joined by David Dian. He's the author of Chain of Title. It's a book all about how these amateurs who had no prior knowledge of the legal system, the housing law foreclosure rules, housing finance, basically educated themselves and learned that all these foreclosures that were going on were essentially being done illegitimately with paperwork or people who were foreclosing without proper standing to foreclose.

And it's about how they banded together and used the internet to find each other, to teach themselves how all this super complicated stuff worked to fight against what they saw as these illegitimate foreclosures. And it's a fascinating book.

Tracy Alloway (3:06)

I'm really excited for this one. Let's get started.

Joe Weisenthal (3:20)

Thank All right, David, thank you very much for joining us here in studio.

David Dayen (3:23)

Thanks for having me, I think you summed it up. I think I can go home.

Joe Weisenthal (3:26)

Great, all right, well, thanks for... All right, well, that was this week's edition of Odd Lots. No, you could probably summarize it better than me, but what is the essence of your book, and why were you moved to write this book?

David Dayen (3:38)

Well, this is true, I did a story, I wanted to write this story from the perspective of those most powerfully affected by the financial crisis. There's been over 400 books. There's actually a website out there that shows how many books there have been about the financial crisis, and it's over 400 Wow.

Joe Weisenthal (3:55)

I think I would have been able to name about four or five.

David Dayen (3:58)

So I did want to attack it from a different angle and look at these people who, as you said, had no institutional knowledge, resources, were fighting their own foreclosures and suddenly stumbled upon this big secret. And it was really kind of a revolutionary act that they did, they read their own mortgage documents and they found these discrepancies in them.

And then they, instead of just using that to fight their own cases, they decided to look in the public records and become citizen journalists in a way. And they found each other and then decided really to build a movement around this, to get this into the hands of people who could maybe do something about it.