2012 Spring Symposium Resources

The
latest controversy surrounding the mortgage settlement involves the charge that
banks, which mishandled thousands of troubled mortgages, are getting a taxpayer
incentive, through the government’s existing Home Affordable Modification
Program (HAMP), to live up to their obligations under the settlement.
Under the proposed deal, the banks will pay only $5 billion in cash with the
remainder coming from mortgage-principal reductions. Scholars such as
former TARP special inspector-general and NYU Law Professor Neil Bankofsky
worry that if taxpayers pay banks as part of the settlement, it will have no
punitive or deterrent effect.

What
the Rob o-Signing Settlement means for all Borrowers

The
“robo-signing” settlement is a national settlement between state attorneys
general and large mortgage servicers implemented to generally improve the
mortgage servicing industry. Among the provisions in the settlement are a
prohibition of robo-signing—people signing court affidavits to allow
foreclosure without reading relevant documents—and a requirement that servicers
“promptly” record payments and post them within a two-day window for borrowers
to view. Other provisions require more disclosure about payments in bills
to borrowers and restrictions on various servicing fees. Additionally,
force-placed rules require that a servicer only get force-placed insurance when
it has actual cause to believe that there is no existing insurance policy
protecting the borrower. Although the settlement applies only to Wells Fargo,
Bank of America, Citigroup, JPMorgan Chase, and Ally Financial/GMAC, the
federal government could mandate that its servicing rules apply to all federal
institutions more broadly.

Fore closures
(2012 Robosigning and Foreclosure Abuse Settlement)

The recent recession has been
exacerbated by the rise in foreclosures by homeowners, with nearly 4 million
families losing their homes from 2007 to 2012. However, recent studies have
revealed fraud within the foreclosure process over the past five years, particularly
with “robo-signing” where foreclosures resulted from forged or un-reviewed
documents.
In response to this evidence, the
government reached a $26 billion settlement with five of the largest U.S. banks
to provide relief to a small portion of delinquent borrowers. Under the
settlement, investigators have access to releases regarding the foreclosure
process, as well as the right to investigate other elements that contributed to
the housing bubble. Although many homeowners still face foreclosure, the
settlement may expand to $45 billion if all fourteen major servicers
participate.

The
$25 Billion Housing Set tlement: Regulations with a Side of Cash

The
$25 billion housing settlement reached by California Attorney General Kamala
Harris will help the housing market, although the biggest benefit may be in the
details of the settlement and not in the billion dollar headlines. The
settlement is not perfect, but it will help the current situation. This
assistance will not come in the form of a broad overnight fix of cash payments
to those in default, but with the help of legislation already in place, it will
come in the form of a slow, gradual, lasting attitude adjustment of what it
means to be in default.

Who
lose s in foreclosure settlement?

The
country’s largest banks are moving towards a massive $25 billion foreclosure
settlement. The deal is intended to balance the interests of the banks
with those of underwater and foreclosed homeowners, and state attorneys
general. But who will be the ultimate winners and losers is yet to be
determined.

Mortgage
Settlement or Mortgage Shakedown?

This
article criticizes the February 9, 2012, national mortgage settlement reached
by the administration and 49 attorneys general with five big banks (Bank of
America, JP Morgan, Chase, Wells Fargo, and Ally Financial) for having too
little a connection to the harms alleged by the government Plaintiff. The
government alleges that the banks used foreclosure documents that were
“robo-signed” by executives who did not check the details and added unnecessary
fees. The mortgage settlement provided $17 billion in loan modifications, $3
billion in refinancing relief, $1.5 billion for actual foreclosed borrowers,
and $3.5 billion for state and federal governments for consumer protection
programs. However, only a small number of “robo-signed” documents involved
borrowers capable of paying their mortgages. Therefore, a majority of the settlement
has nothing to do with “robo-signing” or unnecessary fees – the very harms
alleged by the government Plaintiff. The article contrasts this approach to the
approach taken by former New York Attorney General Eliot Spitzer, who attained
sizeable settlements by directly linking them to the harms alleged: $1.4
billion from investment banks in 2003, and $250 billion from the tobacco
industry in 1998. The article concludes by suggesting that a court that is
asked to approve the settlement should reject it.

Mortgage settlement: one
step forward, one step back

The Obama administration
and the state attorneys general recently announced the completion of what’s
being touted as the largest consumer financial protection settlement in U.S.
history. The country’s top mortgage servicers agreed to provide as much as $25
billion to help some past and current homeowners. Banks regularly submitted
foreclosure documents that were not properly reviewed or notarized. This
article investigates how this settlement provides meaningful assistance for
distressed homeowners and is a move towards housing recovery.

F or
legal teams in historic $25B mortgage settlement, little sleep at the end

This
article discusses a historic settlement negotiated by the Justice Department’s
Thomas Perrelli where forty-nine states and the federal government agreed to
settle with the nation’s five largest financial institutions over mortgage
servicing and foreclosure abuses. Bank of America Corp., JP Morgan Chase
& Co., Wells Fargo & Co., Citigroup, Inc. and Alley Financial, agreed
to pay a $25 billion settlement in the largest joint state-federal settlement
in history. The bulk of the money ($20 billion) will go toward various relief
programs for homeowners, including at least $10 billion in principle reduction.
The banks are required to pay the remaining $5 billion to the states and
federal government. The settlement also includes new mortgage serving
standards, which will mark foreclosure as a last resort, and set procedures and
timelines for the review of loan modification plans. The settlement does
not prevent state and federal authorities from investigating criminal actions
rooted in the packaging of residential mortgage backed securities.

Wells
Fargo: National Mortgage Settlement to Cost $720 Million in Interest

This
newswire discusses Wells Fargo’s assertion that it will lose $720 million in
interest income over a period of years due to the national mortgage settlement
reached in February of this year. The lost interest is a result of lost
interest payments from a refinancing program set up for an expected 20,000
borrowers who owe more than their homes are worth (an unpaid principal balance
totaling approximately $4 billion). Of the total $25 billion national mortgage
settlement, Wells Fargo will contribute $5.3 billion: $3.4 billion in loan
modifications, $900 million in total relief for the refinancing program, and $1
billion for foreclosure-related problems. Wells Fargo, who earned $49.4 billion
from interest income in 2011, said it has already set aside reserves for loan
modifications and foreclosure assistance.

Foreclosure
Settlement with Banks Filed in Federal Court

The article discusses the $25 billion foreclosure agreement
that ended federal and state investigations into the foreclosure practices of
five U.S. banks, including Bank of America and JPMorgan. The settlement will
provide $20 billion in relief for borrowers, and $5 billion for state and
federal governments. The settlement will also establish revised standards for
loans that aim to prevent future foreclosure abuse. A monitoring committee
comprised of state financial regulators, state attorneys general, the
Department of Justice, and Department of Housing and Urban Development has also
been created to ensure that banks abide by the agreement. There will be penalties of $1 million for
certain violations and $5 million for repeated violations.

What
Is MERS and W hat Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60%
of All Mortgages, But Has ZERO Employees)

Mortgage
Electronic Registration Systems, also known as “MERS”, is name of the company
created and owned by all of the big banks that processes title to most U.S.
properties. In fact, MERS processes the titles to nearly 60% of U.S.
properties. But astonishingly, MERS does not have a single employee
working for it. This article addresses the effects that MERS causes in
relation to the foreclosure problems in the residential real estate market.

False
Affidavits in Foreclosures: What the Robo-Signing Mess Means for Homeowners

After
the recent “robo-signing” scandal, several large banks temporarily
froze all pending foreclosures. For some homeowners, the robo-signing mess may
create opportunities to challenge their foreclosures in court or negotiate with
lenders to avoid foreclosure. This article investigates the massive
robo-signing problem and what it means for homeowners.

MERS?
It May Have Swallowed Your
Loan

This
article discusses the role that Mortgage Electronic Registration Systems
(“MERS”) plays in the mortgage industry as titleholder of nearly half of all
home mortgages in the country. Judges and lawmakers are raising questions about
MERS, including how it can claim title to all of these mortgages without having
invested any money in a single loan. While MERS has distanced itself for the
dubious behavior of its members, MERS itself has not been accused of
wrongdoing. The article covered roughly twenty years of MERS problematic
record-keeping, including the inability to know who owned a piece of property,
MERS’ liberal “deputization” of those in the mortgage industry, and the fact
that fewer than thirty percent of mortgages had accurate records in MERS.
Officers at MERS realize that they are in dangerous waters: several federal
agencies are investigating MERS, MERS will no longer accept unverified new
officers, and MERS seems to be willing to revoke memberships. However, judges
are still asking whether MERS acted with “the utmost good faith and loyalty in
the performance of its duties.”

All
in One Basket: The Bankruptcy Risk of a National Agent-Based Mortgage Recording
System

Professors Hunt, Stanton, and Wallace
explain that Mortgage Electronic Registration Systems (“MERS”), which owns
legal title to at least 30 million mortgages in the U.S. and was a key part of
the mortgage securitization apparatus in the 1990s and 2000s, is under pressure
from public and private lawsuits and faces the threat of insolvency. The
authors suggest that there is an assumption that if MERS entered into
bankruptcy, the mortgages it owns would not enter its estate and would not be
available to creditors. This article challenges that assumption, pointing to
the authority that the Bankruptcy Code confers on the bankruptcy trustee to
bring into the estate real property interests that the debtor could have
conveyed to a good-faith purchaser. There is a risk that MERS can convey its
mortgages to a purchaser acting in good faith.
Part of the risk is due to the fact that the company can sell the
mortgages, has a constitutionally protected property interest in the mortgages,
is a creditor of mortgage borrowers, and owns a beneficial interest in the
mortgages. Another part of the risk is
inherent in any mortgage recording system that operates nationally and holds
mortgages as an agent. The authors conclude that policymakers should consider
the risk when considering whether MERS should be replaced and what its
replacement should be.

Kamala Harris To
Fannie Mae And Freddie Mac: Halt Foreclosures In California

The
Attorney General, Kamala Harris, will ask Edward DeMarco, head of the Federal
Housing Finance Authority, to suspend foreclosures in California until the
Authority has investigated the potential effect of principal reduction. So far, Mr. DeMarco has not allowed principal
reduction, and he is therefore unlikely to suspend foreclosures. Mr.
DeMarco argues that principal reduction poses substantial challenges without
proven effectiveness. The federal government disagrees, arguing the
principal reduction is more likely to prevent defaults than other loan
restructurings. Meanwhile, Ms. Harris has been one of Mr. DeMarco’s most
outspoken critics, calling for his resignation and filing suit against Fannie
Mae in December of last year.

Part
226-Regulation Z

Issued
by the Board of Governors of the Federal Reserve System as part of the Truth in
Lending Act, Regulation Z seeks to “promote the informed use of consumer credit
by requiring disclosures about its terms and cost.” Reg. Z applies to two
different sets of rules: one to open-end credit, such as home-equity lines, and
another to closed-end credit, such as car loans. The rules for open-end credit
require accurate disclosure of the Annual Percentage Rate (APR), variable
rates, penalty rates, minimum interest charge any grace period where payment
can be delayed without a finance charge, and fees imposed by creditor. Rules
for closed-end credit contain a consumer’s right to rescind a transaction
involving a lien on the consumer’s principle dwelling except in certain
situations and require accurate disclosure of principle loan amount, itemization
of the amount financed, APR, variable rate information and payment scheduled to
repay the obligation. Reg. Z does not
apply to business, commercial, agricultural or organizational credit, where the
credit extended is for business, commercial or agricultural purposes

FHA Loan
Requirements

The
FHA underwrites single family and multi-family home mortgages issued by
FHA-approved lenders. For a homebuyer to qualify for the FHA loan, the
homebuyer cannot have a mortgage expense to effective income ratio (mortgage
cost and home ownership related costs divided by gross monthly income) greater
than 29%, and cannot have total fixed payments to effective income (mortgage
payments and associated home ownership costs plus all recurring monthly
installment debt divided by gross monthly income) greater than 41%.
Additionally, to qualify for a FHA loan, the homebuyer must have sufficient
credit history and a certified FHA appraiser must conclude that the home is in
good condition and the home does not exceed the maximum loan-to value amount
stipulated by the FHA.

Attorney
General Kamala D. Harris Joins Legislative Leaders to Unveil California
Homeowner Bill of Rights

This article announces the landmark
settlement negotiated by Attorney General Kamala Harris on behalf of California
home owners who have suffered the devastating effects of the mortgage and
foreclosure crisis. The Homeowner Bill
of Rights is designed to protect California communities from banks and mortgage
companies’ unfair practices by providing basic fairness and transparency for
homeowners. The Bill of Rights will also
guarantee community tools and tenant protections to prevent blight after bank
foreclosures, enhanced law enforcement to defend homeowner rights and a special
grand jury to investigate financial and foreclosure crime. This comprehensive package is expected to
result in $18 billion of benefits for California homeowners.

California
bill aims to end foreclosure abuses

Attorney General Kamala Harris recently
unveiled the California Homeowner Bill of Rights, a package of bills designed
to curb foreclosure abuses. Included in
the six measures is a bill protecting renters who live in foreclosed
properties, and another creating a special grand jury to investigate financial
foreclosure crimes. Harris aims to end
deceptive practices, including the controversial “dual-track foreclosures”
which allow banks to start the foreclosure process and negotiate a loan
modification simultaneously. Although
lawmakers and Harris’s predecessors failed to pass similar bills previously,
the foreclosure crisis is limiting the legislature’s excuses not to protect
California homeowners. The current
legislative package comes on the heels of Harris securing approximately $18
billion for California over three years from the country’s five largest
lenders.

Examining
Lending Discrimination Practices and Foreclosure Abuses

This article addresses the
accomplishments of the Civil Rights Division in combating unlawful lending
discrimination over the past two years in several key areas: (1) close
collaboration with federal and state partners; (2) lending discrimination
enforcement; (3) pricing discrimination: charging borrowers more because of
their race or national; (4) cases of redlining in mortgage lending; and (5)
discrimination against women on paid maternity leave. In addition to the
traditional fair lending work, this article also highlights the efforts to
protect the rights of the servicemembers through enforcement of the
Servicemembers Civil Relief Act (SCRA).

Problems in Mortgage
Servicing from Modification to Foreclosure

Professor Adam Levitin’s written testimony before the Senate
Committee on Banking, Housing, and Urban Affairs addresses the problems within
the mortgage foreclosure process. He
discusses problems ranging from easily remedied procedural defects to possible
systemic defects. With regard to procedural defects, Professor Levitin states
that the problems will likely be remedied in the short-term and costs will be
passed to future mortgage borrowers. However, if the problems are systemic,
long-term issues may remain for the mortgage system, which will result in
trillions of dollars of financial claims against major financial institutions
and possible financial crisis. Professor Levitin recommends addressing future
systemic risk now to stave off future crises, including serious investigations
by federal regulators and possible legislative responses. He concludes that
staying ahead of systemic risk will stabilize the housing market, and will be
best addressed through a global settlement on mortgage issues.

Home
Affordable Foreclosure Alternatives (HAFA) Program

The Home Affordable Foreclosure Alternatives (HAFA), a part
of the Making Home Affordable Program, is designed for individuals who cannot
afford their mortgage payment and who are considering transitioning to more
affordable housing. HAFA provides two options for transitioning out of a
mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale,
the mortgage company allows an individual to sell his/her house for an amount
that falls “short” of the amount he/she owes. In a DIL, the mortgage company permits the
individual to give the title back, transferring ownership back to the mortgage
company. To be eligible for HAFA’s assistance, an individual must live in the
home or have lived there within the last 12 months; have a documented financial
hardship; not have purchased a new house within the last twelve months; have a
first mortgage of less than $729,750; have obtained the mortgage on or before
January 1, 2009; and must not have been convicted of felony larceny, theft,
fraud, forgery, money laundering or tax evasion in connection with a mortgage
or real estate transaction. HAFA also offers benefits to ease the transition,
including free advice from housing counselors and licensed real estate
professionals; complete release from a mortgage debt after sale of the
property; guaranteed waiver of the deficiency by the servicer; minimized
impacts on credit scores than foreclosure or conventional short sales; and
$3,000 in relocation assistance provided by HAFA.

A ‘Sensible’
Outline for Housing Solution

In
this article, the author argues that the economy will not rebound in a
meaningful sense until the housing market stabilizes. The author alleges that government sponsored
mortgage programs have created a moral hazard while generating little
results. The author urges for “a more
aggressive posture . . . in addressing the widespread and systemic fraud that
occurred in our mortgage and housing sectors” and calls for market based
solutions. This article includes notes
from real estate experts Kenneth Rosen and Lew Ranieri. Rosen and Ranieri argue that the US housing
market is repairable and the current situation can be remedied through proper
flow of credit, mortgage modifications, and rent-to-own programs. Rosen and Ranieri, while acknowledging the
role of government in rental programs, urge for a private sector based
solution.

The
Academic Analysis of the 2008 Financial Crisis: Round 1

This
analysis of the 2008 financial crisis is a compilation of articles and studies
from the academic community that addresses four main sub-topics relating to the
crisis. First, there is a comparison of
the 2008 crisis to the Great Depression of the 1930’s and a suggestion of
retroactive solutions and mitigation ideas for both of these national housing
price crashes. This is followed by an
analysis of whether modern mortgage market conditions contributed to the
downturn and a look at possible exasperating inputs present in the 2008
environment that were not characteristic of earlier decades. The next set of
papers reviews the impact of the 2008 financial crisis on non-financial firms
and addresses the inquiry of why some credit-worthy firms, as a result of the
crisis, did not receive the capital they deservedly required. The article ends with a look at the banking
industry and a description of the effects of the 2008 crisis on this sector,
leading the reader from initial credit shortage to eventual failure.

How
Debt-Ridden Housing Holds Back U.S. Recovery: Mian and Sufi

Professors Atif Mian and Amir Sufi argue
that the impact of declining home values upon the broader economy is due to the
debt-ridden nature of the housing market. Generally, a decline in housing
prices aid consumers looking to buy larger homes. However, because most
homeowners utilize great amounts of debt to purchase their homes, lower home
values end up negatively affecting household spending.
First, a decline in a home’s collateral
value prevents owners from securing additional loans with their home value. Next,
the rampant use of debt to purchase homes often leads to loan defaults and foreclosures,
which also harms household spending. Finally, lower home values may lead to
deleveraging even for homeowners who pay their mortgages.
Thus, the authors conclude that high
debt levels were the primary impetus behind the negative impact that declining
home values have had on the economy. Policy changes should therefore account
for the existence of debt in the housing market, rather than simply trying to
artificially inflate home prices.

In-House Counsel’s Role in the Structuring of Mortgage-Backed
Securities

This article examines how
in-house counsel should address complex legal transactions by examining their
role in the structuring of mortgage-backed securitization transactions. The
article discusses whether, in
order to own and enforce the mortgage loans backing those securities, a SPV
“purchasing” mortgage loan must take physical delivery of the notes and
security instruments in the precise manner specified by the sale agreement. The
article further analyzes (i) the extent that the controversy has merit; (ii)
whether in-house counsel should have anticipated the controversy; and (iii)
what in-house counsel could have done to avert or, after it arose, to mitigate
the controversy. Finally, it examines how the foregoing analysis can help to
inform the broader issue of how in-house counsel should address complex legal
transactions.

The
Role of GSEs and Housing Policy in the Financial Crisis

This presentation focuses on the role of
Government-Sponsored Enterprises and housing policy in the financial crisis,
and was part of the testimony for the Financial Crisis Inquiry Commission. The presentation asserts that the housing
policy was a catalyst in the crisis, but no changes to the policy during the
last decade were found to have actively expanded the incentives to make
low-quality, high-risk, mortgages.
High-risk mortgage purchases and guarantees by GSEs played a major role
in expanding the crisis because rather than stabilizing the markets, as a
government entity should do, these actions were destabilizing. GSEs engaged in high-risk mortgage activity
primarily to increase profits, but were also motivated by Housing Goals. Unlike GSEs, traditional FHA activity
dramatically decreased as subprime lenders and the FHA played a minor role in
the crisis, and evidence suggests the Community Reinvestment Act did not have a
unique impact on the financial crisis.
Other essential factors leading up to the financial crisis included the
nation’s trade deficit and global saving glut, U.S. monetary policy,
innovations in underwriting and securitization, commercial/investment banks,
and OTC credit default swaps.

Reforming the U.S. Mortgage Market Through Private Market Incentives

This article develops and evaluates a
proposal to reform the U.S. mortgage system along private-market principles and
without any form of Government Sponsored Entities (GSEs). The proposal would reduce the GSE conforming
loan limit by $100,000 each year until the limit reaches zero and GSE activity
disappears. The transition would be
smooth, anticipated by private markets, and allow for a government reaction
should it fail to proceed as expected.
The proposal advocates continuing the current FHA and HUD programs in
support of lower-income families. The
article argues that the private market would provide the stability and access
to mortgage credit that is required by U.S. homebuyers. First, the GSEs have played no role in originating
U.S. mortgages and only a minor role as investors in these mortgages. Second, Western Europe provides a very
important case study of the high performance achieved by private mortgage
markets in the absence of significant government interventions. The article also evaluates alternative proposals.

Fixing Mortgage Finance: What to Do with the Federal Housing Administration?

This
article argues that while Fannie Mae, Freddie Mac, and private subprime lenders
have deservedly garnered the bulk of attention and blame for the mortgage
crisis, other federal programs also distort our mortgage market and put
taxpayers at risk to finance massive financial bailouts. The most prominent of
these risky agencies is the Federal Housing Administration (FHA). The FHA
currently backs an activity portfolio of over $1 trillion. Even relatively small changes to this
portfolio’s performance could result in significant losses to taxpayers because
of its economic value of $2.6 billion (representing a capital ratio of 0.24
percent). The taxpayer is responsible
for any losses above the FHA’s current capital reserves. Reasonably foreseeable changes to the FHA’s
performance could easily cost the taxpayer tens of billions of dollars, which
would surpass the ultimate cost of the Troubled Asset Relief Program (TARP)
bank bailouts. The article concludes by recommending that the FHA scale back
immediately. Instead, an emphasis should
be placed on improving its credit quality to protect the taxpayer and the
broader economy. Ultimately, the agency
should be placed on a path to elimination, and its risk-taking should be
transferred back to the private sector.

Are Short Sellers Informed? Evidence from the 2007–2008 Subprime Mortgage Crisis

This paper examines short sale activities surrounding
financial firms’ announcements of asset write-downs during the 2007–2008
subprime mortgage crisis. Short sellers accumulate short positions prior to
write-down announcements, and stocks experience significantly negative returns
around such announcements. These results suggest that short interests’ return
predictability is due to short sellers’ informational advantage. In the
announcement month, short sellers increase their positions significantly and continue
to increase them thereafter. This suggests that there is a feedback effect for
the disclosed write-downs on financial firms’ existing exposures. The valuable
information contained in the short interests should encourage regulators to
mandate disclosure of short sale activities more frequently.

Foreclosure
fighters and occupiers

This article discusses how San Francisco
Assessor-Recorder Phil Ting announced “the first audit of foreclosure records
in the state of California,” which revealed the statistics regarding violations
of law in relation to foreclosure. The article further tells the stories of
several foreclosure victims. According to Mesha Monge-Irizarry, whom Bank of
America threatens to evict from her home, “There are 14 bank-owned home
foreclosures in the Bayview on Quesada Avenue alone in a three-block range.”
The Occupy Movement has spawned a powerful nationwide backlash against
foreclosures and spun off assertive re-occupations by owners of their
foreclosed homes.

Leverage: State Enforcement
Actions in the Wake of the Robo-Sign Scandal

Mortgage
lenders and mortgage servicers involved in the robo-signing scandal exposed
themselves to liability. This is especially
true in states applying Unfair and Deceptive Acts and Practices (UDAP)
laws. UDAP laws prohibit unfair and
deceptive practices and have been used to rein in abusive practices in car
sales, telemarketing, and tobacco product sales. Attorneys that seek to eliminate abusive
practices and reform mortgage markets may be able to use UDAP laws as leverage
against mortgage lenders and servicers. UDAP laws provide state attorneys an
“opportunity [that] can give rise to critical advances in stabilizing home
prices and the mortgage market, and reduce volatility in those prices and
markets.”

The Case Against Allowing
Mortgage Electronic Registration System, Inc. to
Initiate Foreclosure Proceedings

The
article argues that granting MERS standing in foreclosure proceedings weakens
the protection foreclosure laws provide to homeowners. MERS is an electronic clearinghouse that
allows lenders to record newly originated mortgages without having to record the
mortgages with the county clerk’s office.
As such, the MERS system is a more efficient way to conduct
business. However, it tends to run afoul
of foreclosure laws. The article argues that MERS could potentially cloud the title
to land, and the author suggests that any reform to the mortgage system should
not be attempted by the mortgage industry or MERS, but by legislatures.

Doomed
From The Start-A Critique Of The Home Affordable Mortgage Program

This
article critiques the effectiveness of the Affordable Mortgage Program (HAMP)
and its companion programs. These programs were proposed by President Obama in
2009 and were intended to cease the foreclosure crisis. Proponents hoped
the programs would help as many as 4 million borrowers avoid foreclosure by the
end of 2012. This article dissects what went wrong with HAMP, and includes an
analysis of strategic defaults, securitization and legal liability. It further
lays out proposed and best solutions. Finally, the article provides an outlook
for the real estate market.

The
Properties of Instability- Markets, Predation, Racialized Geography, and
Property Law

This
article considers the recurring instability of home ownership experienced by
minority property owners. It
alleges that the instability reflects an ongoing crisis of purposeful involuntary
divestment of land owned by members of racial minorities. This crisis has
presented a disquieting reality of persistent and enduring instability for
minorities. The article argues that fraud, exploitation, and desperation enable
property markets. It further suggests that there is a need to emphasize an
under-theorized stick in the bundle of property rights: “the right to keep.”

Property
Title Trouble In Non-Judicial Foreclosure States: The Ibanez Time Bomb?

In this article, Professor Renaurt analyzes the
effects on clear title when a property is foreclosed due to the irresponsible
and/or fraudulent handling of mortgages.
Renaurt looks closely at states where non-judicial foreclosure
procedures are permitted, such as Arizona, California, Georgia and Nevada. The debate centers around whether foreclosure
procedures are designed to (1) ensure that those with current authority have
the right to eject people from their homes, or (2) whether these rule are too
technical and may actually allow homeowners to stay in their homes despite
their financial delinquencies.
Ultimately Renaurt concludes that property title trouble is likely to
occur in all of the above-mentioned states except Arizona.

Six Years On and Still Counting: Sifting Through the Mortgage Mess

In this
article, Robert Hockett discusses a solution to the current devastating
mortgage market slump, and in the process he unpacks many complex issues. First, Hockett identifies the various
interests at stake as well as the constituencies that hold these
interests. He then isolates the
overlapping interests that exist among the various constituencies, including
the general public. Next, Hockett catalogues the impediments that stand in the
way of satisfying these interests, including the collective action
problem. Finally, Hockett offers what he
views as a best next step, which would require municipalities to exercise their
eminent domain power in partnership with investors.

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