Law Commons^™

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. …

Curtailing The Economic Distortions Of The Mortgage Interest Deduction, William T. Mathias

University of Michigan Journal of Law Reform

Many Americans consider the mortgage interest deduction a necessary fixture of the American tax system. In this Article, Mathias examines the economic underpinnings of the deduction and finds that it cannot be justified on purely economic grounds. He then evaluates the major policy arguments for the mortgage interest deduction and concludes that it is inefficient, inequitable, and too costly in its present form to be justified on policy grounds. Finally, the author advocates for the elimination or substantial reduction in the size and scope of the mortgage interest deduction.

Alternative Mortgage Instruments: Authorizing And Implementing Price Level Adjusted Mortgages, Joel J. Goldberg

University of Michigan Journal of Law Reform

Of the institutions authorized to make mortgage funds available, only federally-chartered and a small minority of state-chartered savings and loan associations are presently authorized to make PLAM loans. This is due, in part, to a variety of legal and underwriting problems that may outweigh the theoretical advantages of PLAM financing. This Note evaluates these legal and underwriting problems and proposes legal measures to accommodate PLAM financing. Part I discusses the development and advantages of the PLAM. Part II analyzes the legal and practical underwriting objections to PLAM financing, including interest regulations, tax ramifications, and commercial desirability. Part II also suggests …

Selected Problems In Wrap-Around Financing: Suggested Approaches To Due-On-Sale Clauses And Purchaser's Depreciable Basis, Sanford M. Guerin

University of Michigan Journal of Law Reform

This article will address two unresolved issues surrounding the WA transaction which result from the inherent flexibility available for negotiating financing terms in the absence of an institutional lender. Part I discusses the circumstances warranting exclusion of the WA loan from the purchaser's depreciable basis. Part II addresses whether, and when, a due-on-sale clause in the senior mortgage should negate the possibility of utilizing WA financing.