Law Commons^™

Eminently Reasonable, David J. Reiss

David J Reiss

Local governments across the country are considering an innovative use of eminent domain. They propose to condemn underwater mortgages (those that exceed the fair-market value of the home) in their communities and restructure them so that home­owners can afford their payments and so that the new mortgage is for less than the fair market value of the property. If this proposal is implemented, the local government will pay the owner of mortgages of "underwater" homes the fair market value for the mortgages. The local government will then restructure each mortgage by reducing the principal amount owed to be in line …

Comment On The Use Of Eminent Domain To Restructure Performing Loans, David J. Reiss

David J Reiss

There has been a lot of fear-mongering by financial industry trade groups over the widespread use of eminent domain to residential mortgages. While there may be legitimate business reasons to oppose its use, its inconsistency with Takings jurisprudence should not be one of them. To date, the federal government’s responses to the current crisis in the housing markets have been at cross purposes, half-hearted and self-defeating. So it is not surprising that local governments are attempting to fashion solutions to the problem with the tools at their disposal. Courts should, and likely will, give these democratically-implemented and constitutionally-sound solutions a …

Comment On The Federal Housing Finance Agency’S Strategic Plan: Fiscal Years 2013-2017, David J. Reiss

David J Reiss

This is a comment upon Performance Goal 4.3 from the Federal Housing Finance Agency’s Strategic Plan: Fiscal Years 2013-2017. Performance Goal 4.3 addresses the future of Fannie Mae and Freddie Mac as well as the future of the infrastructure of the residential housing finance market. This comment will address the future of Fannie and Freddie after they exit conservatorship. Once analyzed in the context of regulatory theory, Fannie and Freddie’s future seems clear. They should be privatized so that they can compete on an even playing field with other financial institutions, and their public functions should be assumed by pure …

Book Review: Edward L. Glaeser, Triumph Of The City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, And Happier (The Penguin Press 2011), David J. Reiss

David J Reiss

It is always a bit unnerving to read someone else’s love letters, but even more so, when you have the same object of desire. Edward Glaeser’s TRIUMPH OF THE CITY is a love letter to cities and to New York City in particular. Glaeser provides a theoertical framework of the city, arguing that “Cities are the absence of physical space between people and companies. They are proximity, density, closeness.”

Glaeser prescribes three simple rules to protect the vitality of the urban environment: First, cities should replace the current lengthy and uncertain permitting process with a simple system of fees. Second, …

Fannie Mae And Freddie Mac: A Bibliography, David J. Reiss

David J Reiss

This is an unannotated bibliography of writings about Fannie Mae and Freddie Mac as well as some material that covers other government sponsored enterprises such as the Federal Home Loan Bank System. While it is comprehensive, it is not exhaustive, with a focus on work published through 2011 by government agencies, economists, legal and policy scholars, private sector analysts and think tanks. It does not include Congressional testimony and shorter works. This bibliography will be posted on Wikipedia so that others can make additions to it.

Consumer Protection Out Of The Shadows Of Shadow Banking: The Role Of The Consumer Financial Protection Bureau, David J. Reiss

David J Reiss

Consumer protection remains the stepchild of financial regulation. Notwithstanding the fact that the economic doldrums we find ourselves in originated in the under-regulated subprime mortgage sector, relatively few academic commentators focus on the role that consumer protection can play in reducing such risks as well as in restoring the balance between consumer and producer in the financial markets. This essay suggests that consumer protection regulation has an important role to play in the regulatory structure of the shadow banking sector.

This essay does four things. First, it describes the role of shadow banking in the residential mortgage market—the shadow mortgage …