Law Commons^™

Dispossessing Resident Voice: Municipal Receiverships And The Public Trust, Juliet M. Moringiello

University of Michigan Journal of Law Reform

The residents of struggling cities suffer property dispossessions both as individual owners and as municipal residents. Their individual dispossessions are part of a cycle that often begins with industrial decline. In Detroit, for example, more than 100,000 residents have lost their homes to tax foreclosure over a four-year period that bracketed the city’s bankruptcy filing. Falling property values, job losses, and foreclosures affect municipal budgets by reducing tax revenues. As individual dispossessions exacerbate municipal financial crises, residents can also face the loss of municipal property. Struggling cities and towns often sell publicly owned property—from parks to parking systems—to balance municipal …

Dispossessing Detroit: How The Law Takes Property, Mary Kathlin Sickel

University of Michigan Journal of Law Reform

Introduction for the University of Michigan Journal of Law Reform's Symposium “Dispossessing Detroit: How the Law Takes Property,” hosted on November 9 and 10, 2019.

The Constitutionality Of Using Eminent Domain To Condemn Underwater Mortgage Loans, Katharine Roller

Michigan Law Review

One of the most visible and devastating components of the financial crisis that began in 2007 and 2008 has been a nationwide foreclosure crisis. In the wake of ultimately ineffective attempts at federal policy intervention to address the foreclosure crisis, a private firm has proposed that counties and municipalities use their power of eminent domain to seize “underwater” mortgage loans—-mortgage loans in which the debt exceeds the value of the underlying property—-from the private securitization trusts that currently hold them. Having condemned the mortgage loans, the counties and municipalities would reduce the debt to a level below the value of …

Eminent Domain For The Seizure Of Underwater Mortgages, Sarah Thompson

University of Michigan Journal of Law Reform Caveat

Like many cities in the United States, Richmond, California suffered greatly from the recent mortgage crisis. The foreclosure crisis hit Richmond hard in 2009, when more than 2,000 homes in Richmond went into foreclosure. This figure is especially shocking given that there were 18,659 owner-occupied housing units in the city at that time. In 2012, the city saw an additional 914 foreclosures and a foreclosure rate of thirty out of 1,000 homes (well above the national average of thirteen of every 1,000 homes). Today, it is reported that nearly forty-six percent of homes in Richmond are “underwater,” meaning that what …

Facing The Facts: An Empirical Study Of The Fairness And Efficiency Of Foreclosures And A Proposal For Reform, Debra Pogrund Stark

University of Michigan Journal of Law Reform

Lenders view real estate foreclosures as too expensive and time consuming a process which needlessly increases the costs of making loans. Others complain that the foreclosure process fails to adequately protect the borrower's equity (the value of the property in excess of the debt secured by the property) in the mortgaged property.

This article tests these views by gathering new data on the fairness and efficiency of the foreclosure process. Based on the data collected (which confirms some assumptions but disproves others), the author proposes a reform of the foreclosure process to promote the interest of both lenders and borrowers. …

Legal Interpretation And A Constitutional Case: Home Building & Loan Association V. Blaisdell, Charles A. Bieneman

Michigan Law Review

The approaches of Hughes and Sutherland are but two extremes in constitutional interpretation. Though only two results were possible in the case - either the Act was constitutional or it was not - there are more than two methods by which an interpreter could reach those results. This Note explores possible ways of deciding Blaisdell, using the case as a vehicle for delimiting the boundaries of a positive constitutional command. As a sort of empirical investigation of legal philosophy, the Note examines how various interpretive theories affect an interpreter's approach to the case, and the results these theories might …

Future Interests-Remainder To A Class As A Vested Remainder

Michigan Law Review

Testator left to his daughter certain real estate "as her sole and separate property during her natural life and at her death to her children absolutely." One of the children mortgaged his interest in the remainder to plaintiff and died, the life tenant surviving him; and thereafter the plaintiff brought suit for foreclosure. Held, this was a remainder to uncertain persons which did not vest in anyone during the life of the life tenant; and therefore the mortgage was a nullity. Deener v. Watkins, 191 Ark. 776, 87 S. W. (2d) 994 (1935).

Specific Performance--Damages--Action At Law By Vendor Of Land For The Full Purchase Price

Michigan Law Review

In an action at law by a vendor of land for breach of contract by the purchaser, the title not having passed, the traditional measure of damages is the difference between the contract price and the value of the land at the time the vendor's conveyance was due. But where a conveyance is not yet due from the vendor a majority of jurisdictions allow recovery of all but the last installment of the purchase money, on the ground that in that case the promise to pay is independent of the vendor's promise to convey. Even where a conveyance is due …

Fixtures - Effect Of Forfeiture Of Lease On Rights Of Conditional Vendor Who Sold Chattels To Lessee Under Title Retention Agreement

Michigan Law Review

L executed a ninety-nine year lease of certain Chicago real estate to T, who agreed to erect thereon, as security for the payment of rent, a building of a certain description and to keep the premises free and clear of all liens arising from the construction of the building. The lease was recorded, and the building was erected with funds procured by the sale of bonds secured by a trust mortgage of the leasehold to E. When completed the building contained, as required by city ordinance, an automatic water sprinkling system, purchased by T from V under a …

Vendor And Purchaser - Mortgaging Of Land By Vendor - Effect On Vendee's Duty To Continue Installment Payments

Michigan Law Review

Plaintiffs agreed in writing to purchase a tract of land from the defendant, the purchase price to be paid in stated installments or in full at any time at the option of the plaintiffs. Two days after the formation of the contract the defendant mortgaged the land, and about eight months later placed a second mortgage on it. Plaintiffs denied having any knowledge of the mortgages until attempts were made to foreclose them. Previous to this, however, they had defaulted in their payments. In an action in general assumpsit to recover the amount of the installments paid it was held …

Recording - Preservation Of Priority By Recording Within Statutory Period

Michigan Law Review

Plaintiff sued to foreclose a motor vehicle lien filed under the provisions of sections 8524-8528, Mason's Minn. Stat. (1927). Intervener interposed a claim as bona fide purchaser of the automobile before the lien was recorded. Plaintiff did record within the sixty day period fixed by the statute for that purpose. Held, the lien is superior to the title of intervener, even though latter bought the automobile without knowledge or notice, actual or constructive, of the lien. Pratt v. Armstrong et al. (Bud Johnson, Inc., Intervener), (Minn. 1934) 255 N. W. 91.

Constitutional Law - Moratory Legislation

Michigan Law Review

A Minnesota statute, in view of the economic emergency, provided, among other things, that courts might, upon petition of a mortgagor, extend the period of redemption from mortgage foreclosure sales for a definite time not beyond May 1, 1935. If a court took such action, the mortgagor was to remain in possession of the premises and pay a reasonable rental to the mortgagee. Held, by the United States Supreme Court in a five-to-four decision, that this statute did not violate the contracts, or due process, or equal protection clauses of the Constitution. Home Building and Loan Association v. Blaisdell …

Mortgages -Assignment In Good Faith After Maturity Cuts Off Prior Latent Equities

Michigan Law Review

M executed a negotiable note payable to the order of P, secured by a mortgage. After maturity, P assigned the note and mortgage without his indorsement to X for value. Y procured an assignment of these from X by fraud and in turn assigned them to Z, a purchaser without notice and for value. In Z's suit to foreclose the mortgage, X intervened, demanding the delivery of the same to himself. Held, Z's bona fide purchase cut off X's latent equity. Frank v. Brown, 255 Mich. 415, 238 N. W. 237 (1931).

Property - Ownership Of Land

Michigan Law Review

In a suit to foreclose a purchase-money mortgage, the defendant counterclaimed for a breach of covenant against incumbrances on the ground that a right had been acquired to construct a sewer across the premises at a depth of over 150 feet. The court held that this was not an incumbrance within the covenant as title did not extend to a depth beyond which the owner might reasonably use. Boehringer v. Montalto, 254 N. Y. S. 276 (1931).

Fixtures - Rights Of Conditional Vendors -Test Of Material Injury To Freehold

Michigan Law Review

Plaintiff sued to foreclose a mortgage on a hotel. Defendants were vendors of various pieces of hotel equipment, who apparently had filed title-retaining contracts subsequent to the recording of the realty mortgage. The court found that some of the equipment was not attached to the realty at all, and that the rest could be removed without material in jury to the "freehold." Held, that the title of the conditional vendors prevailed, under N. J. Comp. Stat. supp., secs. 182-93. Bank of America National Ass'n. v. LaReine Hotel Corp. (N. J. 1931) 156 Atl. 28.

Mortgages-Assumption-Liability Of Grantees To Mortgagor

Michigan Law Review

Three successive grantees to a plot of land purchased it subject to a first and second mortgage and assumed the obligation to pay the notes which the mortgages secured. Foreclosure proceedings by the first mortgagee absorbed the entire value of the land. The second mortgagee then extended the time payment on the note to the last grantee without the consent or knowledge of the mortgagor or of the intermediate grantees. Such action released the intermediate grantees from liability on the note, for they were only secondarily liable, but did not release the mortgagor, for he as maker was primarily liable …

Mortgages - Effect Of Extension Of Time To Mortgagor

Michigan Law Review

The mortgagor sold part of the mortgaged premises to Morgan and Peters, who assumed the mortgage and agreed to pay the debt. They in turn resold to Jones and Dalton who also assumed the mortgage and agreed to pay the debt. The remainder of the mortgaged premises was sold by the mortgagor to Bursell under a warranty deed free from all incumbrances. The mortgagee at the request of the mortgagor and of Jones and Dalton but without the knowledge of Morgan and Peters extended the time of payment five years. The mortgage remaining unpaid at the end of that time, …

Property-Meander Lines As Boundaries

Michigan Law Review

In a recent decision the supreme court of Michigan has considered anew, and with refreshing insight, the significance of a meander line as a boundary. The case arose on a bill to foreclose a land contract to which the defendant filed a cross-bill alleging fraud in the sale. The property which abutted on Lake Michigan was represented by plaintiff's agent as extending to a point about one hundred feet from the shore of the lake. The meander line was two hundred seventy-seven feet from the water's edge. On the theory that the plaintiff had no interest in the strip between …

Mortgages - Equity Jurisdiction - Personal Decrees Against The Mortgagor

Michigan Law Review

The Michigan supreme court recently held that the jurisdiction of equity in proceedings for the foreclosure of mortgages is governed by statute, and that equity can only render a personal decree against the mortgagor where the statute expressly permits it. This view, if correct, must be recognized as an exception to the well settled doctrine that a court of equity which has obtained jurisdiction of a controversy on any ground or for any purpose, may retain such jurisdiction for the purpose of administering complete relief. Michigan has repeatedly affirmed this general doctrine.

Mortgages-Sale Under Trust Deed Mortgage For Inadequate Price-Effect

Michigan Law Review

The defendant, administrator of the estate of the mortgagee, bought the mortgaged property at the foreclosure sale for one thousand dollars. He bought for himself and not for the estate. He sold the property to a third party for three thousand five hundred dollars. The plaintiff mortgagor brought this suit to compel the defendant to account for the two thousand five hundred dollar difference between the price he paid for the property, and the amount he received for it, allowing a credit for the amount still due on the plaintiff's note-two thousand dollars. Held, where, as in this case, …