Property Law and Real Estate Commons^™

Concentration And Coordination: Antitrust Perspectives On Single-Family Rentals, Margaret Traubert

University of Cincinnati Law Review

No abstract provided.

Facilitating Mortgage Modification To Save Homes And Mitigate Lender Losses, Julia Patterson Forrester Rogers

Faculty Journal Articles and Book Chapters

Homeowners in financial distress or whose homes have been damaged by natural disaster may avoid foreclosure if their lender agrees to modify the loan to reduce payments. Commercial loans may also be modified to avoid foreclosure or in response to changed circumstances or changing market conditions. Although loan modifications are generally beneficial to both borrowers and lenders, barriers to modification exist. The Consumer Financial Protection Bureau (CFPB) has addressed some of the roadblocks to residential loan modifications by regulating the procedures that mortgage servicers must follow in dealing with delinquent borrowers, but the CFPB and its regulations are at risk …

The Constitutionality Of Maine's Real Estate Mortgage Foreclosure Statutes, Kathleen Barry

Maine Law Review

In Maine, Fuentes v. Shevin caused understandable concern about the constitutionality of the state statutes governing real property mortgage foreclosures. Of the foreclosure procedures existing in 1972, only one provided for impartial determination by a court of the mortgagor's breach of condition. In response to Fuentes, the Maine Legislature in 1975 enacted a straightforward provision for foreclosure by civil action. Although the constitutionality of Maine's pre-1975 foreclosure statutes under the fourteenth amendment has not been litigated, lenders in Maine's largest city have recently abandoned all methods of foreclosure except foreclosure by civil action. Lenders, debtors, and legislators in Maine would …

The Waiver Problem In Maine Real Property Foreclosure Law: A Commercial Paper Perspective, Dennis M. Patterson

Maine Law Review

When a mortgagee accepts from a mortgagor payment of part of a mortgage arrearage, does the mortgagee then waive its right to foreclose? Many bank counsel will say that the mortgagee does waive its right to foreclose, and they will point for authority to the broad holding of Savings & Loan Association of Bangor v. Tear. In that decision, the Maine Supreme Judicial Court, sitting as the Law Court, seemed to hold that a mortgagee waives its right to foreclose if it accepts tender of a late payment. This broad interpretation of the Savings & Loan decision has proven to …

Foreclosure Sales As Fraudulent Transfers, David G. Carlson

Articles

The Supreme Court has declared that noncollusive, regularly conducted foreclosure sales are not “constructive” fraudulent transfers voidable by a bankruptcy trustee Uniform state legislation ratifies this instinct for private creditor enforcements. But collusive or irregular foreclosure sales or sales that are intended to hinder, delay, or defraud creditors are subject to creditor attack, even though unsecured creditors are not proper parties to the foreclosure process. In such cases, unsecured creditors can cloud the title obtained from foreclosure in the cases of collusion, irregularity or fraudulent intent. This article examines precisely when foreclosure sales can be avoided by unsecured creditors of …

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

Faculty Scholarship

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 …

Forsake Not Foreclosure, Seng Wei, Edward Ti

Research Collection Yong Pung How School Of Law

Regardless which way market forces push property prices, the principal sum owed to a mortgagee is unaffected while interest is payable by the mortgagor to account for the mortgagee’s cost of capital and underwriting risks. If a mortgagor is unable to service its mortgage, then as protection and enforcement of the secured land, the remedies available to a mortgagee include sale, foreclosure, possession and appointment of a receiver. Because foreclosure exchanges debt for title, the remedy is at odds with the idea that a lender does not set out to take investment risk. Unsurprisingly, foreclosure as a remedy is hardly …

Theft Of The American Dream: New York City's Third-Party Transfer Program, Joseph Mottola

St. John's Law Review

(Excerpt)

On September 5, 2018, Paul Saunders discovered a notice on the front door of his mother’s home: it stated that the property, a Brooklyn brownstone owned by the family for over forty years, now belonged to a company called Bridge Street. His mother, seventy-four-year-old retired nurse Marlene Saunders, had been notified several months earlier that her home, valued at two million dollars, was in danger of being foreclosed because she owed New York City (the “City”) $3,792 in unpaid water charges. Her son had already paid the water bill, but when he contacted the water department, he discovered that …

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 …

Non-Debt And Non-Bank Financing For Home Purchase: Promises And Risks, Shelby D. Green

Elisabeth Haub School of Law Faculty Publications

This Article explores the phenomenon of the NDNBs in home purchase and finance that has gained a growing presence in the mortgage marketplace since the 2008 crisis. Part II offers a deeper discussion of the risk-prone practices leading to the 2008 housing crisis and the regulatory and industry responses for recovery. Parts III and IV describe the emerging new models of home purchase. Part IV explores some of the apparent and hidden risks in these transactions. Part VI concludes with suggestions for assessing and managing risks and for reforms.

A-Void-Able Consequences: Void Sales & Subsequent Purchasers Under Arkansas’S Statutory Foreclosure Act, Hannah Hungate

Arkansas Law Notes

This Comment explores Arkansas’s Statutory Foreclosure Act and addresses the question of whether there can be a “subsequent purchaser for value” when a foreclosure sale is void from the outset. After a review of the Act itself, distinction between void and voidable foreclosures of property, findings of other state courts, and proper application of the Act, the author urges the Arkansas Supreme Court to make a formal declaration finding that purchasers of property foreclosed upon in a void sale are not “subsequent purchasers for value” under the meaning of the statute.

Bankruptcy & The Underwater Home: A Case For Real Property Redemption, David Sheinfeld

Michigan Business & Entrepreneurial Law Review

Chapter 7 of the U.S. Bankruptcy Code exists to satisfy the claims of creditors and preserve an economic “fresh start” for the debtor after bankruptcy. In exchange for surrendering her property to the trustee to have it monetized (i.e., sold), the debtor receives a discharge of her debts and an injunction against future creditor in personam actions to recover them. However, the in personam injunction is insufficient to protect consumer debtors who are in default on mortgages encumbering underwater homes because the creditor’s in rem rights remain; after the conclusion of the case, the creditor can continue foreclosure proceedings, which …

Yesterday I Was Lying: Creeping Preclusion Of Reciprocal Fee Awards In Residential Foreclosure Litigation, Eric A. Zacks, Dustin A. Zacks

St. John's Law Review

(Excerpt

As a result of the high volume of foreclosure litigation in the wake of the Great Recession, scholars have explored several outgrowths of the foreclosure crisis, developing a burgeoning body of research. Scholars and commentators have authored studies about a wide variety of foreclosure-related topics, ranging from the disparate racial effects of the housing crisis to the many legislative and court-instituted policies enacted to ameliorate the harsh reality faced by financially distressed homeowners, all the way through books examining the aftermath of the crisis and lessons learned from the entire experience.

Our previous contributions to this evolving body of …

Screened Out Of Housing: The Impact Of Misleading Tenant Screening Reports And The Potential For Criminal Expungement As A Model For Effectively Sealing Evictions, Katelyn Polk

Northwestern Journal of Law & Social Policy

Having an eviction record “blacklists” tenants from finding future housing. Even renters with mere eviction filings—not eviction orders—on their records face the harsh collateral consequences of eviction. This Note argues that eviction records should be sealed at filing and only released into the public record if a landlord prevails in court. Juvenile record expungement mechanisms in Illinois serve as a model for one way to protect people with eviction records. Recent updates to the Illinois juvenile expungement process provided for the automatic expungement of certain records and strengthened the confidentiality protections of juvenile records. Illinois protects juvenile records because it …

Cranesbill Tr. V. Wells Fargo Bank, 136 Nev. Adv. Op. 8 (March 5, 2020), Brittney Lehtinen

Nevada Supreme Court Summaries

The Court determined that homeowners may cure defaults as to superpriority portions of HOA liens much like first deed of trust holders; however, failure to explicitly or implicitly direct allocation of payments by either debtors or creditors requires court intervention to decide what is “just and equitable.”

Berberich V. Bank Of America, 136 Nev. Ad. Op (Mar. 26, 2020), Amelia Mallette

Nevada Supreme Court Summaries

The Supreme Court of Nevada considered whether a quiet title action from a foreclosure sale was barred by NRS 11.080 because Berberich was in possession of the property for five years before commencing the action. The Court held that the limitations period outlined in NRS 11.080 will not run against an owner who is in undisputed possession of the land.

Contract Consentability: Autonomy Threats, Benefits, And Framing, Eric A. Zacks

Law Faculty Research Publications

No abstract provided.

Saticoy Bay Llc V. Nev. Ass’N Servs., 135 Nev. Adv. Op. 23 (Jul. 3, 2019), Katrina Fadda

Nevada Supreme Court Summaries

The Court held that (1) under Nevada's HOA foreclosure redemption statute NRS 116.31166(3) a homeowner may use proceeds from the foreclosure sale to go towards redemption of the property; and (2) that sufficient compliance with the statute is enough to satisfy the statute's requirements.

Daisy Trust V. Wells Fargo Bank, N.A., 135 Nev. Adv. Op.30 (Jul. 25, 2019), Julia Armendariz

Nevada Supreme Court Summaries

The Court determined that (1) NRS § 106.210 and NRS § 111.325 do not require a beneficiary to be identified on the publicly recorded deed of trust to establish ownership interest in the subject loan and (2) a loan service agreement or an original promissory note is not required to by the loan servicer to assert the Federal Foreclosure Bar on another’s behalf so long as properly authenticated business records can establish the ownership interest and (3) The Federal Foreclosure Bar preempts NRS § 116.3116(2) and prevents an HOA foreclosure sale from extinguishing the first deed of trust.

Still Standing, Barely: Bank Of America Corp. V. City Of Miami And The Impact On Fair Lending Litigation, Trevor C, Hoffberger

Maryland Law Review

No abstract provided.

Path To Destruction: Cook County's Property Tax System Is A Cause For Concern As It Mimics The Defunct Taxing Procedures That Led To The Detroit Foreclosure Crisis, Robert Romano

Chicago-Kent Law Review

For decades, Cook County, Illinois, has had one of the highest property tax rates in the country, and as a result the County has begun to experience unprecedented foreclosure rates which has contributed, in part, to the State’s significant population decline. Residents are forced to endure a property tax system that disproportionately burdens low-income homeowners, while providing tax breaks to higher-income individuals and commercial owners. The primary causes and characteristics of Cook County’s defunct property tax system are strikingly similar to those that sent the City of Detroit spiraling into bankruptcy in 2013.

This note provides a comparative analysis of …

Modern Waste Law, Bankruptcy, And Residential Mortgage, Jill M. Fraley

Scholarly Articles

Around the time of the subprime mortgage collapse, lenders began in earnest to sue borrowers by adapting the traditional law of waste. Today, these claims continue to rise in frequency and to expand to more jurisdictions. Lender waste claims provide a “work around” for state mortgage laws that prohibit personal deficiency judgments after foreclosure and are potentially non-dischargeable in bankruptcy.

While a recent wave of scholarship has addressed the problems of how the bankruptcy system handles mortgages, scholars have not yet explored the use of waste actions by lenders and how waste judgments intersect with bankruptcy and foreclosure. Using new …

Yesterday I Was Lying: Creeping Preclusion Of Reciprocal Fee Awards In Residential Foreclosure Litigation, Eric A. Zacks, Dustin A. Zacks

Law Faculty Research Publications

No abstract provided.

Unconscionable: Tax Delinquency Sales As A Form Of Dignity Taking, Andrew W. Kahrl

Chicago-Kent Law Review

No abstract provided.

Sfr Inv.'S Pool 1, Llc V. First Horizon Home Loans, 134 Nev. Adv. Op. 4 (Feb. 1, 2018), Brendan Mcleod

Nevada Supreme Court Summaries

The Court determined that, under provisions of NRS 116.31162, when an HOA records a notice of a foreclosure sale, any subsequent buyer who purchases the property is subject to that notice that a foreclosure may be imminent.

Stategraft, Bernadette Atuahene, Timothy Hodge

All Faculty Scholarship

Although sometimes difficult to detect, governmental power abuses can have detrimental impacts. Property tax assessments provide an effective lens to examine this phenomenon because, given the complexity of calculating property tax assessments, it is difficult for citizens to know when local government has exceeded its legitimate taxing authority and crossed into the realm of illegal extraction. Michigan is an ideal case study because it protects property owners by making assessment-related power abuses more visible through a unique state constitutional provision: property tax assessments cannot exceed 50 percent of a property’s market value. Abuses have persisted nevertheless. Between 2011 and 2015, …

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 …

No Brakes: Loan Acceleration And Diminishing Foreclosure Defenses, Eric A. Zacks, Dustin A. Zacks

Law Faculty Research Publications

No abstract provided.

Leverage: State Enforcement Actions In The Wake Of The Robo-Sign Scandal, Raymond H. Brescia

Maine Law Review

In the fall of 2010, the revelations that tens of thousands of foreclosure filings across the nation were likely fraudulent—if not outright criminal—sparked a nation-wide investigation by all fifty state attorneys general to assess the extent of the scandal and its potential impacts, but also to consider likely legal and policy responses to such behavior. One of the tools at the state attorneys general’s disposal that might rein in this behavior includes each state’s Unfair and Deceptive Acts and Practices (UDAP) laws. Such laws typically prohibit “unfair” and “deceptive” practices, which are described loosely in these laws, and often give …

Foreclosure Diversion And Mediation In The States, Alan M. White

Georgia State University Law Review

The recent mortgage foreclosure crisis, whose economic effects are well known, transformed state legal structures governing the mortgage foreclosure process. What had been a relatively routine system of default judgments and auction sales has evolved into a negotiation and workout practice in which homeowners contest foreclosures, demand loan modifications and short sales, and propose other alternatives to foreclosures.

A profusion of state laws and court orders were adopted between 2008 and 2014 with the aim of promoting negotiated foreclosure alternatives. These laws have produced a variety of experiments in the “laboratories of democracy.” The defaults—whether home loans are renegotiated, defaults …