Other People's Houses

May 15, 2014
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.

COPYRIGHT(2014) Kirkus Reviews, ALL RIGHTS RESERVED.

September 1, 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

Copyright 2014 Library Journal, LLC Used with permission.