Law Commons^™

Crypto In Real Estate Finance, R. Wilson Freyermuth, Christopher K. Odinet, Andrea Tosato

Faculty Publications

Blockchain and cryptocurrencies have ushered in a digital gold rush. But all that glitters is not gold. The latest fad is the use of non-fungible tokens (NFTs) to purchase and finance real estate. Typically, crypto real estate transactions begin with the transfer of title for a residential property into a dedicated business entity, such as a limited liability company. Thereafter, an NFT is ‘minted’ and used to represent the ownership interest in that entity. The real property is then marketed online specifying that, to acquire it, one simply purchases the relevant NFT via a blockchain transfer. Crucially, buyers are expected …

The New Model Negotiated Alternative To The Foreclosure Act, R. Wilson Freyermuth, Dale A. Whitman

Faculty Publications

One of the many painful lessons learned from the mortgage crisis that began in 2007 is that foreclosure is often a costly, slow, inefficient, and uncertain process. The additional cost and uncertainty for lenders are magnified when the balance of the mortgage debt exceeds the value of the collateral (that is, when the borrower is “underwater”), and thus full recovery by the lender of its investment is unlikely. Ways to avoid this misery are for the lender (usually represented by the servicer for a secondary market purchaser or a securitized trust) and the borrower to enter into a deed in …

“But My Lease Isn’T Up Yet!”: Finding Fault With “No-Fault” Evictions, Eloisa Rodriguez-Dod

Faculty Publications

Historically, tenants could be evicted when their actions put them “at-fault.” Grounds for “at-fault” eviction (i.e., evictions for cause) include a tenant’s failure to pay rent, a tenant’s holding over after termination of the lease, a tenant’s material noncompliance with the lease agreement, and a tenant’s failure to maintain the premises materially affecting health and safety. Recently, some landlords have been evicting tenants for no fault of their own.

This article focuses on three reasons for attempted “no-fault” evictions: foreclosure of the premises, proposed sale of the premises, or intended re-occupancy by the landlord. Part II of this article provides …

Community Collateral Damage: A Question Of Priorities, Andrea Boyack

Faculty Publications

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 …

An Evolving Foreclosure Landscape: The Ibanez Case And Beyond, Peter R. Pitegoff, Laura S. Underkuffler

Faculty Publications

Mortgage securitization, subprime lending, a persistently weak housing market, and an explosion of residential mortgage defaults – today’s homeowners and banks face a new and challenging landscape. Recently, courts in several states have issued decisions that alter the terrain for mortgage foreclosures. In Massachusetts, New Jersey, and New York, among other states, courts have dismissed foreclosure actions on the basis of what might seem to be highly technical deficiencies in the pleading or proof. The most well-known–and controversial–in this cluster of cases is U.S. Bank National Ass’n v. Ibanez, decided by the Supreme Judicial Court of Massachusetts this year. In …

Stop Shutting The Door On Renters: Protecting Tenants From Foreclosure Evictions, Eloisa Rodriguez-Dod

Faculty Publications

This article discusses existing and proposed federal and state law affecting tenants’ rights in foreclosure. As “Foreclosure” signs rapidly join “For Sale” signs across the country, the national foreclosure crisis has not only displaced homeowners, but a plethora of renters as well. The approach taken by states concerning tenants affected by foreclosure varies greatly. Furthermore, a recently enacted Federal law, created specifically to help tenants in foreclosure, does not relieve the uncertainty in resolving this issue. In addition to being the first to critique the new federal law, this article offers recommendations for legislation that may better protect tenants from …

Reforming Foreclosure: The Uniform Nonjudicial Foreclosure Act, Dale A. Whitman, Grant S. Nelson

Faculty Publications

The Uniform Nonjudicial Foreclosure Act is one of the few creative approaches to mortgage foreclosure to emerge in many decades. In this Article, the authors examine why uniformity in foreclosure law among the states in desirable and, accordingly, advocate foreclosure reform. They analyze the Act, promulgated in 2002, giving specific attention to the Act's new methods of foreclosure by negotiated sale and by appraisal. They also examine the Act's numerous special protections for residential debtors and consider the effectiveness of the Act's procedures concerning subordinate leases, titles arising from foreclosures, surpluses and deficiencies resulting from foreclosures, and fairness of foreclosure …

California's Foreclosure Statutes: Some Proposals For Reform, Cynthia Mertens

Faculty Publications

Spurred by the harsh economics of the Great Depression, California enacted several statutes designed to protect pledgors of real property from unfair and often ruinous deficiency judgments. This legislation includes Code of Civil Procedure sections 580a,the fair value section, 580b,the purchase-money anti-deficiency statute, 580d; the nonjudicial foreclosure anti-deficiency statute, and 726, the "one-action" rule. Three decades of judicial interpretation, however, have created a body of case law which fails to advance the legislative purposes upon which the courts purportedly base their decisions.

The time has come for California to substantially revise its Depression-era anti-deficiency legislation in order to express and …