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Full-Text Articles in Law
A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine
A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine
Brooklyn Journal of Corporate, Financial & Commercial Law
Optimism is an indispensable element of effective salesmanship. It is therefore quite natural for the directors of public companies to want to optimistically tout the potential long-term benefits of investing in their companies. After all, directors of public companies must be empowered to attract the attention and money of American investors. But what happens if these long-term projections fail to come true? Who is to blame for long-term projections that are simply unrealistic? A doctrine called the “bespeaks caution” doctrine has emerged in order to govern these inquiries, and holds that these optimistic forward-looking statements are legally immunized provided that …
Preventing Future Economic Crises Through Consumer Protection Law Or How The Truth In Lending Act Failed The Subprime Borrowers, Jeff Sovern
Faculty Publications
This Article argues that one cause of the current economic crisis was that the federal Truth in Lending Act (TILA) failed to provide mortgage borrowers with the tools to determine whether they would be able to meet their loan obligations, and that as a result many borrowers assumed loans on which they would later default. The Article first explores the disclosures for adjustable-rate mortgages-which were commonly used for subprime loans-and explains how those disclosures misled borrowers about their monthly payments. Next, the Article reports on a survey of mortgage brokers conducted in July of 2009. The brokers were nearly unanimous …
Rethinking Disclosure In A World Of Risk-Based Pricing
Rethinking Disclosure In A World Of Risk-Based Pricing
Patricia A. McCoy
The residential mortgage market in the United States has changed significantly since the passage of current federal mortgage disclosure laws in the 1960s and 1970s. In this Article, Professor Patricia McCoy advocates for the reform of these traditional disclosure rules. After describing the evolution of the subprime mortgage market and providing a description of current federal disclosure laws, she explores how these new market dynamics cause the traditional disclosure rules to break down in the subprime market. Professor McCoy concludes with proposals to counteract false advertising practices, facilitate "meaningful comparison-shopping, and formulate streamlined disclosures addressing loan applicants' greatest concerns in …