His real name is most likely “Jack Napier.” And the Joker was never particularly sane to begin with. What happened to him – at least in Alan Moore’s graphic novel, The Killing Joke – was a major brain trauma and chemical bath orchestrated by his psychiatrist (who happened to be his uncle).
The event made whatever sanity he had left snap. He turned from an average joe into what we all know him as today: crazy as hell.