Law Commons^™

Underwater Mortgages For Underwater Homes: The Elimination Of Signals In The Coastal Lending Market, Peyton J. Klein

Vanderbilt Law Review

Climate change and sea level rise threaten to increase the default risk of mortgages on homes in coastal areas. Faced with this reality, small coastal lenders have begun selling more climate-sensitive mortgages to Fannie Mae and Freddie Mac, thereby transferring the risk of climate-induced default off the lenders’ books. Fannie Mae and Freddie Mac play a crucial role in supporting America’s mortgage finance system by purchasing qualifying private home loans, packaging them into investable security pools, and guaranteeing timely payment of principal and interest to outside investors. Through selling mortgages to Fannie Mae and Freddie Mac, lenders can use their …

Bankruptcy & The Underwater Home: A Case For Real Property Redemption, David Sheinfeld

Michigan Business & Entrepreneurial Law Review

Chapter 7 of the U.S. Bankruptcy Code exists to satisfy the claims of creditors and preserve an economic “fresh start” for the debtor after bankruptcy. In exchange for surrendering her property to the trustee to have it monetized (i.e., sold), the debtor receives a discharge of her debts and an injunction against future creditor in personam actions to recover them. However, the in personam injunction is insufficient to protect consumer debtors who are in default on mortgages encumbering underwater homes because the creditor’s in rem rights remain; after the conclusion of the case, the creditor can continue foreclosure proceedings, which …

Innovative Solutions In The Field Of The Institute Of Property Rights And Other Real Rights – The Key To The Liberalization Of The Economy, D. Karahodjaeva

Review of law sciences

This article discloses the views on the essence and significance of property rights and other real rights in the contemporary legal order of a market type in the conditions of development and liberalization of the economy; list of real rights, which are new for the domestic civil legislation and are to find their legislative solution; innovative solutions in this field.

Innovative Solutions In The Field Of The Institute Of Property Rights And Other Real Rights – The Key To The Liberalization Of The Economy, D. Karahodjaeva

Review of law sciences

This article discloses the views on the essence and significance of property rights and other real rights in the contemporary legal order of a market type in the conditions of development and liberalization of the economy; list of real rights, which are new for the domestic civil legislation and are to find their legislative solution; innovative solutions in this field.

Testing Fannie Mae's And Freddie Mac's Post-Crisis Self-Preservation Policies Under The Fair Housing Act, Shelby D. Green

Cleveland State Law Review

Beginning in the 1930s, the federal government adopted programs and policies toward safe and decent housing for all. The initiatives included the creation of the Federal Housing Administration that, among other things, spurred mortgage lending by guaranteeing mortgage loans to low- and moderate-income borrowers. The creation of the secondary mortgage market by Fannie Mae and Freddie Mac (GSEs) helped provide more liquidity for loan originators. However, somewhere along the way, these GSEs lost their way, as they pursued profitability without regard to risk and heedlessly bought mortgages without considering quality.

The overabundance of poor quality mortgages led to the housing …

Privacy Of Information And Dna Testing Kits, Shanna Raye Mason

Catholic University Journal of Law and Technology

In modern times, consumers desire for more control over their own health and healthcare. With this growing interest of control, direct to consumer DNA testing kits have never been more popular. However, many consumers are unaware of the potential privacy concerns associated with such use. This comment examines the popularity and privacy risks that are likely unknown to the individual consumer. This comment also addresses the shortcomings of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as the Genetic Information Nondiscrimination Act of 2008 (GINA) in regard to protecting individual’s genetic information from misuse. This comment …

Real Property E-Conveyances And E-Recordings: The Solution Or Cause Of Mortgage Fraud, Spencer Hale

Oklahoma Journal of Law and Technology

No abstract provided.

Foiled By The Banks? How A Lender's Decision May Support Or Undermine A Jurisdiction's Environmental Policies That Promote Green Buildings, Darren A. Prum

Michigan Journal of Environmental & Administrative Law

A United Nations Environmental Programme report addressing climate change states that the built environment in both emerging and developed countries accounts for more than forty percent of global energy usage and at least one third of the world’s greenhouse gas emissions. The report further asserts that the built environment offers an unsurpassed opportunity to supply cost effective, lasting, and meaningful reductions in greenhouse gas emissions. In response to this call to action, state and local governments in the U.S. have turned to a variety of policies to ensure that real estate developments within their jurisdictions further green building objectives. However, …

Force-Placed Insurance: The Lending Industry's "Dirty Little Secret", Dana Cronkite

Chicago-Kent Law Review

Force-placed insurance, also called lender-placed insurance, is the insurance policy mortgage lenders obtain on behalf of borrowers when borrowers fail to maintain hazard insurance on their homes. Although the possibility of force-placed insurance is contemplated by mortgage contracts, the policies often provide little coverage and are much costlier than insurance policies acquired on the open market. Lenders obtain the policies at unfairly high prices and sometimes receive kickbacks from the force-placed insurance companies, while borrowers alone bear the burden of paying for them. As such, lenders have no incentive to obtain force-placed insurance at fair prices with adequate coverage. The …

Priority Of Liens Between Construction Mortgagee And Mechanic's Lienors; Wayne Building & Loan Of Wooster V. Yarborough, Allan S. Hoffman

Akron Law Review

Ohio follows the generally accepted rule that where there is a mortgage securing future advances such advances create liens only as they are actually made, unless the mortgagee is obligated to make the advances. In the latter case the mortgagee's lien will date from the time of its recording. In addition to this nonstatutory method by which a mortgagee can obtain lien priority, there is a statutory method by which he can do so, namely the procedure provided by § 1311.14 of Ohio Rev. Code. This statute is not new, having been enacted in 1915. However, in 1919 the Ohio …

The Emperor’S New Clothes: How The Judicial System And The Housing-Mortgage Market Have Turned A Blind Eye To The Destruction Of The Negotiability Of Mortgage Promissory Notes, Roy D. Oppenheim, Jacquelyn K. Trask-Rahn

William & Mary Business Law Review

This Article examines the common notions of negotiable instruments as they relate to the modern day promissory note in the context of residential mortgage lending. The Article further addresses the destruction of the negotiability of such promissory notes through various undertakings added for the benefit of the banking industry, often to the detriment of a borrower. The use of negotiable instruments commenced in the 1800s in England as a way of ensuring a fluid market between trades as there was no fiat currency system in place. The fundamental purpose behind the concept of negotiability was subsequently abrogated by the modernization …

Lending Discrimination, The Foreclosure Crisis And The Perpetuation Of Racial And Ethnic Disparities In Homeownership In The U.S., Aleatra P. Williams

William & Mary Business Law Review

For decades the agencies charged with minding the ‘fair credit and lending’ shop turned a blind eye to those (lenders) who pilfered minority homeownership (and consequently minority wealth) by extending mortgage lending products that were, in many cases, unequal to similarly situated non-minority counterparts. Since the 1950s, when the federal government endorsed homeownership policies for minorities, and the 1960s, when antidiscriminatory D9lending laws were enacted, access to fair mortgage credit has been unattainable. Unbridled lending discrimination culminated in massive foreclosures for a disproportionate number of minority homeowners during the Housing and Foreclosure Crisis. Lenders disparately foreclosed upon upper class, middle …

Mortgage Foreclosure Proceedings: Where We Have Been And Where We Need To Go, Bryan E. Meek

Akron Law Review

The primary purpose for this comment is to provide an overview of the foreclosure process while introducing the laws and regulations that would govern an “ideal” foreclosure system. First, it provides a general introduction to the mortgage/foreclosure process. This introduction is crucial; it will help many to understand the way financial institutions have complicated the foreclosure process. Next, it analyzes various states, labeling them as either having “strict” foreclosure laws and regulations or having “lenient” foreclosure laws and regulations. Lastly, this comment discusses the pros and cons of various foreclosure requirements. The ultimate goal of this comment is to establish …

To Lien Strip Or Not To Lien Strip: Fourth Circuit Blesses Controversial Chapter 20 Valueless Lien Stripping In Re Davis, Timothy M. Todd

South Carolina Law Review

No abstract provided.

Treading Water: Can Municipal Efforts To Condemn Underwater Mortgages Prevail?, Michael S. Moskowitz

Pepperdine Law Review

No abstract provided.

House Swaps: A Strategic Bankruptcy Solution To The Foreclosure Crisis, Lynn M. Lopucki

Michigan Law Review

Since the price peak in 2006, home values have fallen more than 30 percent, leaving millions of Americans with negative equity in their homes. Until the Supreme Court’s 1993 decision in Nobelman v. American Savings Bank, the bankruptcy system would have provided many such homeowners with a remedy. They could have filed bankruptcy, discharged the negative equity, committed to pay the mortgage holders the full values of their homes, and retained those homes. In Nobelman, however, the Court misinterpreted reasonably clear statutory language and invented legislative history to resolve a three-to-one split of circuits in favor of the minority view …

Property And Mortgage Fraud Under The Mandatory Victims Restitution Act: What Is Stolen And When Is It Returned?, Arthur Durst

William & Mary Business Law Review

The United States Circuit Courts of Appeals are split on how to calculate restitution in a criminal loan fraud situation where collateral is involved. This trend is best illustrated in cases involving mortgage fraud. The split stems from disagreement over how to account for the lender’s receipt of collateral property. The Third, Seventh, Eighth, and Tenth Circuit Courts of Appeals consider the property returned when the person defrauded receives cash from the sale of collateral property. The Second, Fifth, and Ninth Circuits deem the property returned when the lender takes ownership of the collateral property. This Note argues that the …

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 …

Half-Way Mark Reached In The Demise Of The Inequitable Application Of The “Due-On-Sale” Clause, Bernard J. Koerselman

Pepperdine Law Review

No abstract provided.

Property Title Trouble In Non-Judicial Foreclosure States: The Ibanez Time Bomb?, Elizabeth Renuart

William & Mary Business Law Review

The economic crisis gripping the United States began when large numbers of homeowners defaulted on poorly underwritten subprime mortgage loans. Demand from Wall Street seduced mortgage lenders, brokers, and other players to churn out mortgage loans in extraordinary numbers. Securitization, the process of utilizing mortgage loans to back investment instruments, fanned the fire. The resulting volume also caused the parties to these deals to often handle and transfer the legally important documents that secure the resulting investments—the loan notes and mortgages—in a careless and sometimes fraudulent manner.

The consequences of this behavior are now becoming evident. All over the country, …

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 …

Putting Equity Back In Reverse Mortgages: How State Legislatures Can Bring Fairness To Home Equity Conversion Mortgages, Andrew S. Helman

Marquette Elder's Advisor

No abstract provided.

The Value(S) Of Foreclosure Law Reform, Melissa B. Jacoby

Pepperdine Law Review

This symposium contribution examines the starkly different values reflected in traditional legal literature on foreclosure law reform in the U.S. as compared to some more recent entries in the wake of the rise of subprime lending and high rates of residential mortgage default. I highlight economist Dean Baker’s “right to rent” proposal, which would give former homeowners leasehold rights at market rates, to illustrate a more progressive set of housing policy considerations and to challenge the assumption that ownership is essential or optimal to promoting various housing objectives.

Foreclosure By Arbitration?, R. Wilson Freyermuth

Pepperdine Law Review

No abstract provided.

Bringing Manufactured Housing Into The Real Estate Finance System, Ann M. Burkhart

Pepperdine Law Review

Eight percent of the United States population - more than 23 million people - live in manufactured homes (also called mobile homes). In some years, more than 30% of the new homes sold have been manufactured. Moreover, manufactured housing is the most important form of unsubsidized affordable housing in this country. Up to two-thirds of the new affordable homes built each year have been manufactured. However, the manufactured housing industry currently is struggling to survive a meltdown in its sales and finance markets. A tremendous obstacle to the industry’s recovery is that most manufactured homes are characterized as personal property, …

Mezzanine Finance And Preferred Equity Investment In Commercial Real Estate: Security, Collateral & Control, Jon S. Robins, David E. Wallace, Mark Franke

Michigan Business & Entrepreneurial Law Review

This article will review both the genesis and the rise in popularity of preferred equity and mezzanine debt, examine their legal and structural differences, and provide some exposition as to how these financing techniques work from security, collateral and control standpoints. We do not undertake in this article to address the differences in tax and accounting treatment between mezzanine loans and preferred equity investments both for either the mezzanine lender or preferred equity investor on the one hand, or for the mezzanine borrower or the common equity investor, on the other hand. In deciding upon which structure to use, transaction …

Maryland Foreclosure Mediation - Working Or Waning? A Critical Look At The State's Foreclosure Mediation Program, Chelsea Jones

University of Maryland Law Journal of Race, Religion, Gender and Class

No abstract provided.

Two Faces: Demystifying The Mortgage Electronic Registration System's Land Title Theory, Christopher L. Peterson

William & Mary Law Review

In the mid-1990s, mortgage bankers created Mortgage Electronic Registration Systems, Inc. (MERS) to escape the costs associated with recording mortgage transfers. To accomplish this, lenders permanently list MERS as the mortgagee of record instead of themselves to avoid the expense of recording any subsequent transfers. MERS’s claim that it is both an agent of the lender and the mortgagee, and the huge gaps left in the public record, give rise to a range of legal issues. This Article addresses whether security agreements naming MERS as a mortgagee meet traditional conveyance requirements and discusses the rights of counties to recover unpaid …

Fair Lending 2.0: A Borrower-Based Solution To Discrimination In Mortgage Lending, Jared Ruiz Bybee

University of Michigan Journal of Law Reform

Fair lending laws promise that borrowers with similar credit profiles will receive similar loan products-regardless of their race. Yet, studies reveal that black and Latino borrowers consistently receive loan products that are inferior to those of white borrowers with similar credit characteristics. Despite frequent amendments since their passage during the Civil Rights Era, the Fair Lending Laws that opened doors for minority borrowers are unable to root out the subtle discrimination that persists in today's mortgage lending market. These traditional Fair Lending Laws are built on an outdated framework that focuses exclusively on punishing lenders and righting past wrongs. This …

Wellenkamp V. Bank Of America: A De-Stabilizing Shift In California Real Estate Financing, Patrick Hart

Golden Gate University Law Review

No abstract provided.