Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business by Jennifer S. Taub, NOOK Book (eBook) | Barnes & Noble
Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

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by Jennifer S. Taub
     
 

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In the wake of the financial meltdown in 2008, many claimed that it had been inevitable, that no one saw it coming, and that subprime borrowers were to blame. This accessible, thoroughly researched book is Jennifer Taub’s response to such unfounded claims. Drawing on wide-ranging experience as a corporate lawyer, investment firm counsel, and scholar of business

Overview

In the wake of the financial meltdown in 2008, many claimed that it had been inevitable, that no one saw it coming, and that subprime borrowers were to blame. This accessible, thoroughly researched book is Jennifer Taub’s response to such unfounded claims. Drawing on wide-ranging experience as a corporate lawyer, investment firm counsel, and scholar of business law and financial market regulation, Taub chronicles how government officials helped bankers inflate the toxic-mortgage-backed housing bubble, then after the bubble burst ignored the plight of millions of homeowners suddenly facing foreclosure.

Focusing new light on the similarities between the savings and loan debacle of the 1980s and the financial crisis in 2008, Taub reveals that in both cases the same reckless banks, operating under different names, received government bailouts, while the same lax regulators overlooked fraud and abuse. Furthermore, in 2013 the situation is essentially unchanged. The author asserts that the 2008 crisis was not just similar to the S&L scandal, it was a severe relapse of the same underlying disease. And despite modest regulatory reforms, the disease remains uncured: top banks remain too big to manage, too big to regulate, and too big to fail.

Editorial Reviews

Library Journal
09/01/2014
In 1984, Leonard and Harriet Nobelman took out an adjustable-rate mortgage to buy a Dallas condominium. By 1989, they had lost their jobs, their monthly payments had risen sharply, and the value of their condo had dropped by over half. They attempted to reduce the mortgage principal through bankruptcy. Taub (law, Vermont Law Sch.) explains how the 1993 decision against them by the U.S. Supreme Court in Nobelman v. American Savings Bank resulted in the safeguarding of the rights of lenders at the cost of homeowners. The author tells how the financial landscape has evolved since that court decision with examples of predatory lending, industry avarice, and desultory government regulation. In essence, this title makes a strong case that while banks have been deemed too big to fail, individual homeowners have been treated as if they are "too small to save." VERDICT Taub's cogently written, accusatory work will interest a wide readership. She highlights the negative treatment of homeowners compared to that of banks and places over three decades of mortgage lending since the 1980s savings and loan (S&L) crisis in sharp perspective.—Lawrence Maxted, Gannon Univ. Lib., Erie, PA
Huffington Post - Glenn C. Altschuler

“Provides a concise, clear, and compelling account.”—Glenn C. Altschuler, Huffington Post

Money Magazine - Pat Regnier

"Over the years I’ve read a tall stack of books about the financial crisis. Other People’s Houses, by Vermont Law School professor Jennifer Taub, provides the clearest, beginning-to-end explanation I’ve seen of what went wrong. And Taub’s beginning is a surprise: A 1993 Supreme Court decision about how bankruptcy law applies to mortgages."—Pat Regnier, Money magazine

The American Prospect - Peter Dreier

“[Other People’s Houses] reminds us that the nation’s economic troubles were entirely preventable. [Taub] pinpoints the key decisions—primarily by presidents, cabinet secretaries, key members of Congress, and government bank regulators—that allowed banks to engage in an orgy of speculation . . . They knew what they were doing and what the consequences might be.”—Peter Dreier, The American Prospect

Massachusetts Center for the Book - Must-Read Nonfiction Book List

Made the 2015 Must-Read Nonfiction Book List compiled by the Massachusetts Center for the Book

Dollars & Sense - Steven Pressman

“A must-read for those wanting to understand what happened to the American Dream of homeownership and building wealth by paying off one’s mortgage. . . . Taub tells a riveting story.”—Steven Pressman, Dollars & Sense

Kirkus Reviews
2014-05-06
A business law expert shines a pitiless light on the subprime mortgage meltdown that kicked off the Great Recession.Remember the savings and loan crisis of the 1980s? Taub (Business Law/Vermont Law School) certainly does, and she spends the first part of her narrative exposing the roots of the 2008 mortgage crisis, revisiting the tale of Harriet and Leonard Nobelman, whose innocent purchase of a Dallas-area condo culminated in a 1993 Supreme Court decision that prevented them from modifying their home mortgage through bankruptcy. Victims of a land-flip-based investment scam, the Nobelmans were, finally, "too small to save." Meanwhile, all the decision-makers who, in a dizzying series of transactions, fueled the Nobelman mortgage received government support, and very few suffered negative consequences. In the second part of the book, Taub traces the housing bubble and mortgage crisis of the new century, which by 2013 saw 5 million homes lost to foreclosure and another 10 million still left underwater. Despite the drag of this negative equity on the fortunes of Main Street, Wall Street appears to be doing just fine. Unsurprisingly, perhaps, Taub finds the same players and practices that brought us the S&L debacle again responsible. She blisters the "legal enablers" who, by their acts or omissions, failed to corral predatory practices and wild speculation. She tells of regulators asleep at the switch and rating agencies beholden to their subjects, of acts by Congress and state legislatures, federal courts and various rule-making agencies, all of which favored the big and powerful financial players. She concludes by dispelling some of the absurd myths surrounding the entire debacle, among them that "nobody saw it coming," that "there was not widespread fraud and abuse," and that the real fault lies "with greedy homeowners who borrowed money and did not pay it back."Meticulously argued and guaranteed to raise the blood pressure of the average American taxpayer.

Product Details

ISBN-13:
9780300206944
Publisher:
Yale University Press
Publication date:
05/28/2014
Sold by:
Barnes & Noble
Format:
NOOK Book
File size:
4 MB

Meet the Author

Jennifer Taub is a professor at Vermont Law School and formerly an associate general counsel at Fidelity Investments. She lives in Northampton, MA.

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Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business 3 out of 5 based on 0 ratings. 1 reviews.
jax2009 More than 1 year ago
The author has a story to tell, a thesis to argue, and a point to make and accomplishes all, however if you were looking for The Book on the 2008 financial crisis, this is not it. What you get out of this book depends on how much you know, or think you know, going in. I thought I knew a good deal going in, yet was able to pick up some important details. The book is heavily footnoted, though mostly with news reports and secondary sources. The story is of the US financial system starting with the S&L crash in the 1970s and 1980s, proceeding to the housing bubble of the 1990s and the crash of 2008, and some of the aftermath. The author's thesis is that this is after all one story, and the S&L crash was an enabler and an (unheeded!) warning of what was to come. The point she argues is that the post-2008 bailout could have and should have included the homeowners and not just the big banks, specifically the ability for bankruptcy courts to modify mortgages and write off principle. It may come as a surprise to some that this is not possible today, thanks (!) to Congress, because until a few years ago it was possible in many states. The author's perspective on all of this is to blame the banks for greed, corruption, predatory lending, and maybe greed again, with the solution being more regulation. My opinion differs slightly here, I do not see the "predatory lending" as a large issue. I think that the author has not included a lot of the perspectives of the real estate or banking industries. She does not seem to think that individual buyers ever speculated on their own principle residence, or on additional properties. She may never have seen any of these "Flip That House!" series where late night viewers are taught to "buy" properties with other people's money. The import of the fact that a third or more of mortgage customers in 2006 never made even the first payment (because they never intended to) seems to have escaped her, even though she does mention the fact. So, in my view, the book never really grapples with the full complexity of the crash. It also does not take into account the "quantitative easing" we have seen since 2012. Since it does mention other events as late as 2013, this is something of an omission as it puts the past into additional perspective – and largely supports the author's ideas. I had higher hopes than this when I ordered the book. The excerpted chapter published online to promote the book relates a bit of Alan Greenspan dialog and properly analyzes it in historical context (as being very nearly insane). And the author does properly quote Greenspan on the nut of this whole deal, on page 164 in text and page 174 as a quote, "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief." Shocked to find gambling going on in the establishment! The author also mentions the market failure in August/September of 2008 which gave rise to the demand for $700,000,000,000 in TARP money, but only in passing. I would give it much heavier emphasis, it puts a lot of past and future behaviors in context. And the author waves off the CRA's contribution to the mess. This is probably correct, but a bit more argument is needed and it is not (in my analysis) quite as trivial as she makes it out. Overall I recommend the book but only mildly.