Law Commons^™

Portland's Exiles: Pricing Out African Americans, Henry Mcgee

Henry W McGee Jr.

Abstract Displacement of Blacks by unprejudiced whites who are willing to live next door to people of color continues to plague African Americans who suffer disrupted neighborhoods. African Americans in Portland, Oregon in the period between 1990 and 2000, were displaced by whites who moved to Northeast Portland because of significantly lower house prices, a consistent characteristic of Black neighborhoods. Hitherto insulated from inflated house prices because of racial prejudice, African Americans developed businesses and social institutions over the decades in which they were able only to purchase homes in Portland’s Black “ghetto.” A sea change in racial attitudes has …

The Mortgage Market Crisis: A Game Theory Analysis, Raquel Mato

Raquel Mato

The mortgage market experienced a global bubble during the early 2000s. The bubble burst in 2006, creating a global financial crisis with widespread repercussions. In this paper, I will discuss how the mortgage market normally works and what changes occurred leading up to the 2000s that allowed for the rapid expansion of the mortgage market. I will talk about contributing factors such as: deregulation of the market, government encouragement of homeownership, the mortgage backed securities market, existing legislation, and a general lack of responsibility by all parties involved. I will use various aspects of game theory to explain how this …

Benefit Of The Homestead Exemption And Bankruptcy’S Fresh Start, Shawn C. Gearhart

Shawn C. Gearhart

This paper explores what the term "benefit of homestead exemption" means in Article X of the Florida Constitution in relation to bankruptcy exemption laws. The 11th Circuit Court of Appeals recently certified the following question to the Florida Supreme Court: “Whether a debtor who elects not to claim a homestead exemption and indicates an intent to surrender the property is entitled to the additional exemptions for personal property under Fla. Stat. § 222.25(4).” This paper explores why the Court should rule why mere ownership does not expressly confer the benefit of a homestead exemption, especially in relation to bankruptcy laws.

“A Psychological Investigation Of Consumer Vulnerability To Fraud: Legal And Policy Implications”, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article focuses on a type of consumer fraud that is particularly problematic because it may not be actionable in some jurisdictions, namely the problem of consumer vulnerability to deception when a consumer notices a problematic term in a contract but is persuaded through deception to proceed with the deal anyhow. Two fraud simulation studies and a follow-up survey demonstrated how this type of fraud operates, found that consumers with certain vulnerability characteristics such as having lower socio-economic status are more susceptible to this type of fraud, and explored some of the psychological reasons why consumers are vulnerable to it …

The Financial Reform Act: Will It Succeed In Reversing The Causes Of The Subprime Crisis And Prevent Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Financial Reform Act: Will It Succeed in Reversing the Causes of the Subprime Crisis and Prevent Future Crises? By: Professor Charles W. Murdock

The current financial crisis, which could have plunged the world into a financial abyss similar to the Great Depression, is far from resolved. The financial institutions, which this article asserts caused the crisis, have returned to profitability and have paid billions of dollars in bonuses, while ordinary Americans have borne the brunt of the meltdown, with formal unemployment hanging around the 10% mark. This has caused some to comment that profits have been privatized and …

Lessons In Price Stability From The U.S. Real Estate Market Collapse, Andrea J. Boyack

Andrea J Boyack

The U.S. residential housing market collapse illustrates the consequences of ignoring risk while funding mortgage borrowing. Collateral over-valuation was a foundational piece of the crisis. Over the past few decades, secondary markets, securitization, policy and psychology increased the flow of funds into real estate. At the same time, financial market segmentation divorced risk from reward. Increased mortgage capital availability, unmitigated by proper risk allocation, led to real estate price inflation. Social trends and government policies exacerbated both the mortgage capital over-supply and the risk-valuation disconnect.

The Dodd-Frank Act inadequately addresses the underlying asset valuation problem. Federal regulation may support market …

Hurricanes, Oil Spills, And Discrimination, Oh My: The Story Of The Mississippi Cottage, Jennifer Evans-Cowley

Jennifer Evans-Cowley

Abstract: Immediately following Hurricane Katrina, the Mississippi Governor’s Commission for Recovery, Rebuilding, and Renewal collaborated with the Congress for the New Urbanism to generate rebuilding proposals for the Mississippi Gulf Coast. One of the ideas generated from this partnership was the Katrina Cottage—a small home that could improve upon the FEMA Trailer. The State of Mississippi participated in the resulting Alternative Housing Pilot Program, which was funded by the U.S. Congress. Five years after Katrina, this study examines how local governments have responded to the Mississippi Cottage Program. The study poses two research questions centered around the barriers residents face …

Consumer Protection Initiatives In The Eu Mortgage Market: A Behavioral Economics Based Critique And Proposal, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article critiques the Commission of the European Union's recent consumer protection initiatives for the EU mortgage market focusing on the revised form of disclosures that the Commission appears poised to mandate in a Directive, providing suggested reforms to this form to make it more effective and proposing four additional consumer protections to empower EU consumers to make wise home loan decisions. The article argues that these additional consumer protections are a necessary condtion to creating the integrated EU mortgage market (with more cross border home loans) that the Commission desires.

The Extent To Which "Yellowstone Injunctions" Apply In Favor Of Residential Tenants: Who Will See Red, Who May Earn Green, And Who May Feel Blue?, Hon. Mark Dillon

Hon. Mark C. Dillon

Difficulties in the residential and commercial real estate markets have caused an influx of cases in the New York State courts by which banks seek the foreclosure of delinquent mortgages and landlords seek the eviction of tenants that are in default of rent payment obligations.

New York State has long recognized "Yellowstone injunctions" in the context of commercial leases, where tenants preemptively obtain court orders enjoining their landlords from terminating their breached leases. The concept is named after its case of origin, First Nat. Stores, Inc. v. Yellowstone Shopping Center, Inc., which was decided by the state's Court of Appeals …

Take This House And Shove It: The Emotional Drivers Of Strategic Default, Brent T. White

Brent T. White

An increasingly influential view is that strategic defaulters make a rational choice to default because they have substantial negative equity. This article, which is based upon the personal accounts of over 350 individuals, argues that this depiction of strategic defaulters as rational actors is woefully incomplete. Negative equity alone does not drive many strategic defaulters’ decisions to intentionally stop paying their mortgages. Rather, their decisions to default are driven primarily by emotion – typically anxiety and hopelessness about their financial futures and anger at their lenders’ and the government’s unwillingness to help. If the government and the mortgage industry wish …

Living Without Colorblindness: Comparing The Us And Singapore's Approach To Racial Equality, Eunice Chua

Eunice Chua

The doctrine of color blindness provides, in a nutshell, that any governmental use of racial classifications will be subject to strict scrutiny by the courts, regardless of whether the purpose of such classification was to enforce or to ameliorate racial inequality. Ardent supporters of color blindness believe that it is firmly rooted in the US Constitution and is not only central to the notion racial equality, but essential to upholding human dignity. This paper seeks to examine this claim by placing the spotlight on Singapore, a country where the use of racial categorizations is an accepted legal norm. I argue …

The Start Of A Revolution: How Shays’ Rebellion Continues Today, Gary P. Opper

Gary P Opper

You might remember from your days in your high school history class the tale of Daniel Shays. He was a poor farmhand from Massachusetts that went on to lead a rebellion against the United States government, whom he and others felt were imposing crushing debt and taxes. Anyone who failed to pay such debts could end up in debtor’s prison and had their property seized.

Shays and his compatriots sought debt relief through lower taxes and receiving funds from the government. They attempted to stop the courts from taking their property by forcing the courts in western Massachusetts to close …

Sitting On Your Rights: Why The Statute Of Limitations For Adverse Possession Should Not Protect Couch Potato Future Interest Holders, Stevie J. Barachkov

Stevie J Barachkov

This article suggests that vested future interest holders have legal recourse to remove adverse possessors during the preceding life tenant’s estate. It explores the British and American legal history that engendered modern adverse possession. It provides a survey of the public policy rationales behind adverse possession and an in depth review of its requisite elements. After examining the legal rights of future interest holders in the Fifty States, this article assesses the options for the future interest holder to obtain relief against either the life tenant or the adverse possessor in the form of actions: on the case; to quiet …

Leveling Localism And Racial Inequality In Education Through The No Child Left Behind Act Public Choice Provision, Erika K. Wilson

Erika K. Wilson

While much attention is paid to issues of segregation and inequality in education, little attention is paid to the role that school district boundary lines play in creating segregation and inequality in education. Living on one side of a school district boundary line rather than another can mean the difference between being able to attend a high achieving resource enriched school or having to attend a low achieving, resource deprived school. Nevertheless, the federal judiciary--the institution looked upon to remedy issues of school segregation and inequality--is unable to adequately remedy segregation and inequality between school districts because it evidences a …

Renters Evicted En Masse: Collateral Damage Arising From The Subprime Foreclosure Crisis, Creola Johnson

Creola Johnson

ABSTRACT: America is experiencing its worst foreclosure crisis in history, and tenants are the silent victims of this crisis. In this Article, Professor Johnson describes the consequences of thousands of tenants of being evicted from residential properties obtained by lenders in foreclosure proceedings against the owners-landlords. The individual consequences include tenants’ renting substandard alternative housing, experiencing disruptions in family life, and even becoming homeless. Societal consequences include the costs imposed upon communities to provide social services to the evicted tenants and their families and the burden on cities in dealing with homes left vacant due to the lenders' inability to …

Renters Evicted En Masse: Collateral Damage Arising From The Subprime Foreclosure Crisis, Creola Johnson

Creola Johnson

ABSTRACT: America is experiencing its worst foreclosure crisis in history, and tenants are the silent victims of this crisis. In this Article, Professor Johnson describes the consequences of thousands of tenants of being evicted from residential properties obtained by lenders in foreclosure proceedings against the owners-landlords. The individual consequences include tenants’ renting substandard alternative housing, experiencing disruptions in family life, and even becoming homeless. Societal consequences include the costs imposed upon communities to provide social services to the evicted tenants and their families and the burden on cities in dealing with homes left vacant due to the lenders' inability to …

Power And Law, Bait And Switch: Debunking “Law” As A Tool Of Societal Change The Disappearing Act Of Affordable Housing In The District Of Columbia, Samuel Jefferson

Samuel Jefferson Jr.

ABSTRACT

POWER AND LAW, BAIT AND SWITCH:

DEBUNKING “LAW” AS A TOOL OF SOCIETAL CHANGE

The Disappearing Act of Affordable Housing in the District of Columbia

by Samuel L. Jefferson, Jr.

I. Introduction

“It was a typical sunny, hot and hazy July afternoon in Washington, D.C. when I, as a 17-year-old, walked down the hill towards my apartment complex. As I approached, I noticed people gathered in the street in front of my building. I also noticed that someone had been evicted. As I moved closer, I noticed that the belongings were mine and my family’s. That’s when, at least …

Valuing Grief: A Proposal To Compensate Relocated Public Housing Resident For Intangibles, Dawn E. Jourdan

Dawn E Jourdan

Residents of public housing are frequently relocated in an effort to modernize antiquated public housing units. While, in the long run, this type of redevelopment is intended to have revitalizing effects on communities, as well as providing better quality units of subsidized housing for those that need it, the resulting displacement can disrupt the stability of the residents' lives. This paper reviews an intentional infliction of emotional distress claim by Three Rivers Legal Services on behalf of the residents of Kennedy Homes to recover for the relocation grief the residents suffered as a result of being permantently relocated from this …

Landlords Of Last Resort: Should The Government Subsidize The Mortgages Of Privately-Owned, Small Multifamily Buildings?, David J. Reiss

David J Reiss

The absence of stable financing options has long caused difficulties for owners of small multifamily buildings. Despite the ongoing maturation of a secondary mortgage market for small multifamily mortgages, this housing stock continues to shrink due to abandonment, demolition, foreclosure and other causes. As these buildings house many low-income households, some have suggested subsidizing the financing costs for the owners of these buildings. Any proposal to subsidize these landlords to meet affordable housing goals, however, should be predicated on determinations that (i) it is an efficient means to provide housing to the neediest tenants and (ii) the multifamily mortgage market …

Book Review: Dan Immergluck, Foreclosed: High-Risk Lending, Deregulation, And The Undermining Of America’S Mortgage Market, David J. Reiss

David J Reiss

This is a book review of Dan Immergluck, FORECLOSED: HIGH-RISK LENDING, DEREGULATION, AND THE UNDERMINING OF AMERICA’S MORTGAGE MARKET (Cornell University Press 2009).

Fannie Mae And Freddie Mac: Creatures Of Regulatory Privilege, David J. Reiss

David J Reiss

This book chapter addresses the appropriate role of Fannie Mae and Freddie Mac, the government-chartered, privately owned mortgage finance companies, in the United States housing finance sector. The federal government recently placed Fannie and Freddie in conservatorship. These two massive companies are profit-driven, but as government-sponsored enterprises they also have a government-mandated mission to provide liquidity and stability to the United States mortgage market and to achieve certain affordable housing goals. How the two companies should exit their conservatorship has implications that reach throughout the global financial markets and are of key importance to the future of American housing finance …

Problems And Reforms In Mortgage-Backed Securities: Handicapping The Credit Rating Agencies, Franz P. Hosp

Franz P Hosp V

Here we go again - another financial mess with credit rating agencies in the cross hairs. This is nothing new. Over the last four decades, credit rating agencies have been associated with several major financial disasters: the bankruptcy of Penn Central Transportation Company in 1970, the bankruptcy of Orange County in 1994, the Asian financial crisis in the late 1990's, the bankruptcy of Enron in 2001, and the bankruptcy of WorldCom in 2002.

Currently, the United States is suffering from an economic crisis precipitated largely by the deterioration of mortgage-backed securities. The process of securitizing mortgages is complex and involves …

First Principles For An Effective Federal Housing Policy, David J. Reiss

David J Reiss

Federal housing policy is heavily funded and made up of a morass of programs. This article provides a taxonomy of goals for housing policy. The article first asks what the aim of housing policy is. In other words, what can a well-designed and executed housing policy achieve? The answer to this question is not at all clear-cut. Some argue that the aim of housing policy is to allow all Americans to live in safe, well-maintained and affordable housing. Others argue for a more modest aim – achieving an income transfer to low- and moderate-income families that mandates that the income …