Law Commons^™

Should The Mortgage Follow The Note?, John Hunt

John P Hunt

The law of mortgage assignment has taken center stage amidst foreclosure crisis, robosigning scandal, and controversy over the Mortgage Electronic Registration System. Yet a concept crucially important to mortgage assignment law, the idea that “the mortgage follows the note,” apparently has never been subjected to a critical analysis in a law review.

This Article makes two claims about that proposition, one positive and one normative. The positive claim is that it has been much less clear than typically assumed that the mortgage follows the note, in the sense that note transfer formalities trump mortgage transfer formalities. “The mortgage follows the …

Taking Bubbles Seriously In Contract Law, John P. Hunt

John P Hunt

This Article argues that bubbles driven by traders with poor judgment exist, can be identified on an aggregate level, and have negative effects on parties that are not involved in the bubble markets. If those premises are accepted, then failing to respect bubble contracts – rescinding bubble transactions – makes sense. Such a rule should deter the formation of bubbles. Moreover, the rule is not in serious tension with the principle of freedom of contract to the degree one might expect. The poor judgment exhibited during a bubble suggests that incapacity should, and mistake and fraud do, apply to a …

Credit Rating Agencies And The 'Worldwide Credit Crisis': The Limits Of Reputation, The Insufficiency Of Reform, And A Proposal For Improvement, John P. Hunt

John P Hunt

The “worldwide credit crisis” has thrust credit rating agencies into the spotlight, with attention focused on their ratings of novel structured finance products. Policymakers have undertaken a number of initiatives intended to address perceived problems with such ratings – enhancing competition, promoting transparency, reducing conflicts of interest, and reducing ratings-dependent regulation. These approaches are all broadly consistent with the dominant academic theory of rating agencies, the “reputational capital” model, which is taken to imply that under the right circumstances a well-functioning reputation mechanism will deter low-quality ratings. The policy initiatives currently under consideration can be seen as efforts to fix …