If I found the story of 56 James Court a depressing tale, it also left me pondering a hidden anomaly: Community First Bank.1 In the five mortgages that the Haroldsons cycled through in five years, the bank that supposedly put “Community First” underwrote mortgage number four. It was a troublesome loan that lasted less than a year. It replaced a previous loan only six months old, and in the process it nearly doubled the family’s debt load. Shouldn’t a community bank have counseled the Haroldsons against signing their names to this loan? But instead, Community First Bank was the one inking the papers.

What was going on? In those boom years, had even community banks become little more than wolves in sheep’s ...

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