Resolving the Foreclosure Crisis PDF Download
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Author: Adam J. Levitin
Publisher:
ISBN:
Category :
Languages : en
Pages : 91
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Book Description
For over a century, bankruptcy has been the primary legal mechanism for resolving consumer financial distress. In the current foreclosure crisis, however, the bankruptcy system has been ineffective because of the special protection it gives most home mortgages. Debtors may modify the terms of all debts in bankruptcy except those secured by mortgages on their principal residences. A bankrupt debtor who wishes to keep her house must pay the mortgage according to its original terms down to the last penny. As a result, many homeowners who are unable to meet their mortgage payments are losing their homes in foreclosure, thereby creating significant economic and social deadweight costs and further depressing the housing market.This Article empirically tests the economic assumption underlying the policy against bankruptcy modification of home-mortgage debtmdash;that protecting lenders from losses in bankruptcy encourages them to lend more and at lower rates, and thus encourages homeownership. The data show that the assumption is mistaken; permitting modification would have little or no impact on mortgage credit cost or availability. Because lenders face smaller losses from bankruptcy modification than from foreclosure, the market is unlikely to price against bankruptcy modification. In light of market neutrality, the Article argues that permitting modification of home mortgages in bankruptcy presents the best solution to the foreclosure crisis. Unlike any other proposed response, bankruptcy modification offers immediate relief, solves the market problems created by securitization, addresses both problems of payment-reset shock and negative equity, screens out speculators, spreads burdens between borrowers and lenders, and avoids the costs and moral hazard of a government bailout. As the foreclosure crisis deepens, bankruptcy modification presents the best and least invasive method of stabilizing the housing market.
Author: Adam J. Levitin
Publisher:
ISBN:
Category :
Languages : en
Pages : 91
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Book Description
For over a century, bankruptcy has been the primary legal mechanism for resolving consumer financial distress. In the current foreclosure crisis, however, the bankruptcy system has been ineffective because of the special protection it gives most home mortgages. Debtors may modify the terms of all debts in bankruptcy except those secured by mortgages on their principal residences. A bankrupt debtor who wishes to keep her house must pay the mortgage according to its original terms down to the last penny. As a result, many homeowners who are unable to meet their mortgage payments are losing their homes in foreclosure, thereby creating significant economic and social deadweight costs and further depressing the housing market.This Article empirically tests the economic assumption underlying the policy against bankruptcy modification of home-mortgage debtmdash;that protecting lenders from losses in bankruptcy encourages them to lend more and at lower rates, and thus encourages homeownership. The data show that the assumption is mistaken; permitting modification would have little or no impact on mortgage credit cost or availability. Because lenders face smaller losses from bankruptcy modification than from foreclosure, the market is unlikely to price against bankruptcy modification. In light of market neutrality, the Article argues that permitting modification of home mortgages in bankruptcy presents the best solution to the foreclosure crisis. Unlike any other proposed response, bankruptcy modification offers immediate relief, solves the market problems created by securitization, addresses both problems of payment-reset shock and negative equity, screens out speculators, spreads burdens between borrowers and lenders, and avoids the costs and moral hazard of a government bailout. As the foreclosure crisis deepens, bankruptcy modification presents the best and least invasive method of stabilizing the housing market.
Author:
Publisher: DIANE Publishing
ISBN: 1437941966
Category : Foreclosure
Languages : en
Pages : 27
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Book Description
This publication highlights MORE-sponsored projects designed to communicate best practices and information about innovative programs to improve conditions in neighborhoods affected by high rates of foreclosure. It also reviews initiatives undertaken by the various Reserve Banks and the Board of Governors to respond to the foreclosure crisis.
Author: Citizens' Housing and Planning Association
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 36
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Book Description
Author: Lynn M. LoPucki
Publisher:
ISBN:
Category :
Languages : en
Pages : 59
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Book Description
Since the price peak in 2006, home values have fallen more than 30%, leaving millions of Americans with negative equity in their homes. Until the Supreme Court's 1993 decision in Nobelman v. American Savings Bank, the bankruptcy system would have provided many such homeowners with a remedy. They could have filed bankruptcy, discharged the negative equity, committed to pay the mortgage holders the full values of their homes, and retained those homes. In Nobelman, the Court misinterpreted reasonably clear statutory language and invented legislative history to resolve a 3-1 split of circuits in favor of the minority view. The Court ruled that debtors could not modify even the unsecured portions of the mortgages on their principal residences. Courts and commentators have since assumed that modification of home mortgages in bankruptcy is impossible.This Article presents a legal strategy for modifying home mortgages despite Nobelman. The strategy requires that debtors move out of their houses, lease the houses for one year, file bankruptcy, and propose mortgage modification plans that pay mortgage holders the full current values of the houses. This Article argues that despite the artificiality of a move-out with the intention to return, bankruptcy judges will approve the plans. The judges will do so because existing precedent requires approval and because the modification plans will be in the best interests of not only the debtors, but also the mortgage holders and the American economy. The strategy may enable hundreds of thousands of homeowners to retain homes they would otherwise have lost to foreclosure.
Author:
Publisher:
ISBN:
Category : Foreclosure
Languages : en
Pages : 25
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Book Description
"Facing the worst foreclosure crisis since the Great Depression, the state of Ohio has responded by focusing on helping the individuals keep their homes. While more needs to be done in that area, including leveling the playing field of the foreclosure process, the state must direct more attention and more resources to the devastating effects that foreclosures are having on entire communities, from the urban neighborhoods of Cleveland or Cincinnati to suburban and rural communities across the state. This paper lays out a detailed, concrete series of steps by which the state can not only better help homeowners and tenants affected by foreclosure, but help stabilize its distressed neighborhoods and communities. These steps include legislative actions as well as changes to existing state programs. Recognizing the constraints on state resources, most of the steps recommended in this paper involve no cost to the state or local government, though some require modest outlays. Ultimately, if the state carries out these recommendations, it will not only benefit many thousands of Ohioans directly, but will preserve billions in property values and untold millions in state and local tax revenues that would otherwise be lost"--Abstract, p.[1].
Author: Bob Wartinger
Publisher: Lulu.com
ISBN: 0578044986
Category : Business & Economics
Languages : en
Pages : 98
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Book Description
What a year in real estate that was! It was hard to face the facts for a while, and my most trusted friends could only shake their heads in sympathy. My brand new house was worth less than fifty percent of its appraised value, and considerably less than the value of the materials and labor that went into constructing it - only one year after being built! I was in a situation all too common in America today - "upside down" - with a large mortgage to pay and increasingly squeezed in my ability to make monthly payments. "Upside Down" is my story: How I resolved the predicament of the investment that wasn't. I have written "Upside Down" to help you and other homeowners who find themselves in a similar real estate predicament. It includes tips and information regarding short sales or, at the very least, resolving difficult mortgage situations.
Author: Nathalie Martin
Publisher:
ISBN:
Category :
Languages : en
Pages : 21
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Book Description
Since the 2008 financial crisis, unprecedented numbers of homes have been lost to foreclosure in the United States, all while public funds for free or reduced fee legal representation in some communities have all but disappeared. This means that most homeowners in foreclosure are unable to find lawyers to represent them. At the same time, clinical legal education, especially in subjects related to business and commercial law, is on the rise. This convergence offers a unique opportunity for law school clinics to give students valuable training in both litigation and financial law and also help fill the deep need for legal representation by homeowners in foreclosure. Each of us has experience representing homeowners in foreclosure, Max at Harvard Law School in the Predatory Lending and Consumer Protection Clinic, and Nathalie in the University of New Mexico School of Law's Business and Tax Clinic. In this Article, we discuss our experiences and offer advice and insights for clinics considering taking cases of this kind. Part I provides a very brief overview of the conditions that led to the financial crisis, a description of the extent of the problem, and a few ways clinical law programs can help. Part II discusses the practical and philosophical reasons why law school clinics play such a pivotal role in stemming the effects of the crisis on homeowners, through examples of cases litigated in Max's clinic. Part Ill attempts to give readers a few of the basic tools they need to add this practice to their clinics for the benefit of individual homeowners and their communities.
Author: Robert V. Wolf
Publisher:
ISBN: 9781457844812
Category : Social Science
Languages : en
Pages : 42
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Book Description
Because the intertwined problems of foreclosure and mortgage fraud have reached crisis proportions they are threatening the stability of entire neighborhoods, making the search for effective responses a priority not only for bankers and real estate brokers but also local governments, Police departments, prosecutors’offices, and community groups. The problem on the ground for the hardest hit communities is that foreclosures and mortgage fraud are fueling a dramatic rise in the number of vacant and abandoned properties. These properties can generate a host of interrelated problems: crime, homelessness, and strains on municipal services, as well as safety hazards and lower property values. In many jurisdictions, the number and location of foreclosed and vacant properties is changing so rapidly that officials have trouble counting them, let alone formulating a meaningful response. This report is intended to serve as a guide to government and law enforcement officials across the U.S. seeking to address these challenges in their own communities. This is a print on demand report.
Author: Adam Michaelson
Publisher: Penguin
ISBN: 1440661936
Category : Business & Economics
Languages : en
Pages : 372
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Book Description
Now in paperback-an inside look at Countrywide Home Loans and the mortgage crisis, from a former mortgage lender executive. In July 2004, Adam Michaelson attended a high-level meeting at Countrywide Financial headquarters about a new loan product that would allow borrowers to pay less than their minimum monthly payment. The "finance jocks" believed that the booming housing market would only get bigger, supporting homeowners in a cycle of borrowing against their houses and refinancing later. They were wrong. And when the bottom dropped out, Countrywide suffered the consequences-as did millions of Americans. With an insider's knowledge and thorough reporting on the impact on American families and the ripple effects on the economy, Michaelson examines the marketing of a mirage and the bad business decisions that destroyed a company, confronts the ethical questions that have arisen in the wake of the foreclosure crisis, and offers creative proposals to prevent such a meltdown from ever happening again.
Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Housing and Community Opportunity
Publisher:
ISBN:
Category : Law
Languages : en
Pages : 544
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Book Description
