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Community Collateral Damage: A Question Of Priorities, Andrea J. Boyack
Community Collateral Damage: A Question Of Priorities, Andrea J. Boyack
Andrea J Boyack
Today’s soaring mortgage default rate and the uncertainty and delay associated with mortgage foreclosure proceedings threatens to cause financial tragedies of the commons in condominiums and homeowner associations across the country. Assessment defaults in privately governed communities result in an inequitable allocation of upkeep costs, and current law provides no way to prevent this spillover effect. But the collateral damages caused by delayed foreclosures and insufficient recoveries can be minimized by gradually increasing the priority position of the association lien.
In a majority of states, association liens are completely subordinate to the first mortgage lien. At foreclosure of the mortgage …
Community Collateral Damage: A Question Of Priorities, Andrea J. Boyack
Community Collateral Damage: A Question Of Priorities, Andrea J. Boyack
Andrea J Boyack
Today’s soaring mortgage default rate and the uncertainty and delay associated with mortgage foreclosure proceedings threatens to cause financial tragedies of the commons in condominiums and homeowner associations across the country. Assessment defaults in privately governed communities result in an inequitable allocation of upkeep costs, and current law provides no way to prevent this spillover effect. But the collateral damages caused by delayed foreclosures and insufficient recoveries can be minimized by gradually increasing the priority position of the association lien.
In a majority of states, association liens are completely subordinate to the first mortgage lien. At foreclosure of the mortgage …
Lessons In Price Stability From The U.S. Real Estate Market Collapse, Andrea J. Boyack
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 …