Friday, February 10, 2012

Reaction to the Mortgage Foreclosure Settlement

Following up on Mark's posts, Matt Yglesias from Slate has some reactions to the foreclosure fraud settlement.  He gives a brief background on the case, then argues that the settlment ($26 billion) was too small and that the government missed a chance to push for large scale reform/destruction of the big banks:

I don't want to be the kind of guy who sniffs at a $26 billion settlement, but the reality is that's a relatively small amount of money. It's small relative to the $250 billion (nominal) tobacco settlement from the late 1990s. Certainly it's small relative to the $700 billion in total underwater mortgage debt outstanding in the United States.

Steve Clowney

February 10, 2012 | Permalink | Comments (0) | TrackBack (0)

This Land is Your Land

Picture 2

In honor of the 30th anniversary of the Falkland Islands war, here's a slideshow of ten little-known international disputes over territory.  All good Americans should stand ready - you never know when our struggle with Tokelau over the future of Swains Island could escalate.

Steve Clowney

(Pic: Swains Island, claimed by both the U.S. and Tokelau.  Note the village of Talauga on left, which is home to all 37 residents of Swains Island.)

February 10, 2012 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 9, 2012

Fun Game: Could Your AG Be Bothered to Compose Her Own Quotes?

Today's foreclosure fraud settlement apparently came with a handy press release template for all the State AGs.  Someone leaked it.  Compare the template to what your AG announces by running a Google news search.  It's fun!

Here's part of the template:

“This agreement is very significant in how it addresses the fraud that these banks committed against many homeowners across our state,” said ___.“This agreement not only provides much needed relief to (STATE) borrowers,but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country.”

And by God, here's News 8 in Des Moines, Iowa, with a hard-hitting report quoting AG Tom Miller on the deal:

"This agreement is very significant in how it addresses the fraud that these  banks committed against many homeowners across Iowa," said Miller.  "This  agreement not only provides badly needed relief to Iowa borrowers, but it also  puts a stop to many of the bad behaviors that contributed to the mortgage mess  throughout Iowa and across the country." 

"in how"?  Come on, fake quote generators --you're making the AGs look bad!

Makes you wonder if robo-signing really seemed that bad to the AGs.

If you find a similar quote from your AG, post it in the comments!

Mark A. Edwards

February 9, 2012 | Permalink | Comments (4) | TrackBack (0)

Foreclosure Fraud Settlement Demonstrates the Power of Capital Relative to the State

Let's say I hire an armed gang to expel you from your house.  My gang removes all of your belongings, changes the locks, and warns you that you'd better not try to come back.  I then sell your house to someone else. 

You might have called the police, but the armed gang I hired actually are the police.  You might have gone to court to stop me, but the court is on my side, because I deliberately mislead the courts.

Now let's say I did the same thing thousands and thousands of times to other people as well.

And you can prove it.

I'd be in pretty big trouble, wouldn't I?  And you'd be entitled to a pretty substantial damages award, wouldn't you?

Not if I'm Bank of America or Wells Fargo.  Then, I simply negotiate from my position of incredible strength, relative to both the state and the individual, and move on.

$1500 to $2000 per home.  That's what people who were wrongfully driven from their homes at gunpoint get under the settlement agreement.  I suppose it will go to the estates of the ones who committed suicide. 




As Yves Smith points out over at Naked Capitalism, $1500-2000 is less than the legal expenses banks incur when a foreclosure is challenged.  It's less than title insurance on homes worth over $200K.

Do you remember that scene in a Tale of Two Cities, when the rich man's carriage, speeding through the marketplace, runs down and kills a young boy?  He throws a coin out the window of the carriage and moves on.  That's the settlement agreement.

And the saddest thing is that it makes no sense to be angry with the attorneys general for reaching this agreement.  Given the power differential, they did the best they could.

At least they didn't negotiate away civil suits by private parties -- although they will be much harder to bring, because states will be closing their civil investigations.

Mark A. Edwards


February 9, 2012 | Permalink | Comments (0) | TrackBack (0)

Grading Miami's New Urbanist Experiment

In 2009, Miami became the first major American city to adopt a New Urbanist zoning code.  Sean McCaughan of The Architect's Newspaper reviews the highs and lows of the code's first three years.  McCaughan critiques the plan's inability to address public transportation, parking requirements, and ugly public buildings.  On the positives side, McCaughan argues that the code strengths are "urban infill, density, and the vitality of the pedestrian experience at the neighborhood level."

Steve Clowney

February 9, 2012 | Permalink | Comments (0) | TrackBack (0)

Wolf on "Green Zoning"

Michael Wolf (Florida) has posted A Yellow Light for "Green Zoning": Some Words of Caution About Incorporating Green Building Standards into Local Land Use Law (The Urban Lawyer) on SSRN.  Here's the abstract:

The focus of this essay is a growing practice to which we can attach the label “Green Zoning” — the incorporation of LEED and competing privately generated standards into local government law, as part of the existing zoning or land use ordinance, or as a free-standing green building ordinance. After reviewing some of the pertinent literature on this topic, this essay will highlight and provide illustrations of six problems with Green Zoning practices: 1. The Delegation Problem — Can and should local laws be based on a moving target (standards set by private parties that continue to change and evolve)? 2. The Compatibility Problem — Are some green building standards inconsistent with good planning practices? 3. The Expertise Problem — Are already overburdened local officials up to the task of incorporating, administering, and overseeing Green Zoning? 4. The Eco-Political Problem — How or should local officials factor in the battles waged over green building standards? 5. The Laboratory Problem — Are variations from locality to locality a good idea, or do state standards make more sense in this area? 6. The Philosophical Problem — What role should builders, architects, and industry experts play in shaping zoning and planning ordinances?

Steve Clowney

February 9, 2012 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 8, 2012

Keep a Very Close Eye on the Foreclosure Fraud Settlement

It seems as though every day for weeks now we've been told a settlement between state attorneys general and fraudulent foreclosers -- by which I mean the largest home mortgage lenders in the country -- is imminent.  The banks appear to be balking because they expected the type of suit filed by New York Attorney General Eric Schneiderman to be prohibited under the settlement -- but since Schneiderman is one of the key players in the settlement talks, there seems to have either been a serious misunderstanding or a serious play for leverage by Schneiderman.  For an excellent analysis of the negotiations, and of the foreclosure crisis generally, I can't recommend Yves Smith's blog Naked Capitalism highly enough.

One issue that MUST be non-negotiable is the ability of people who were wrongfully foreclosed upon to maintain civil suits against their foreclosers.  There is no indication that such suits will be barred under the settlement, but since the negotiations are not transparent we can't know until the settlement is announced.  My first year property students have now spent weeks studying the crisis -- in part because I'm hoping to ready these young lawyers-to-be to take up the fight to ensure that foreclosure fraud doesn't pay and that its victims receive restitution.  But if the state attorneys general negotiate away the only avenue victims of wrongful foreclosure have for relief, it will be the final injustice in a long, long line of them in this crisis.  Not to mention a defeat for the rule of law.

For a very good discussion of how we should assess the settlement, when it is finally arrived at and released to public scrutiny, see this article by Richard Eskow.

Mark A. Edwards

February 8, 2012 in Home and Housing, Mortgage Crisis, Real Estate Finance, Recording and Title Issues | Permalink | Comments (2) | TrackBack (0)

Map of the Day: The Other Side of the Globe

When you were younger did you ever dream of "digging a hole to China" in your backyard?  Well, it turns out that if you live in the U.S. you wouldn't have ended up anywhere near Beijing, even if you had figured out how to dig through the Earth's molten core.  This map tool allows you to see what's on the other side of the globe from where you live.  Click on the link and put your hometown in the middle of "map 1."  The second map shows what's across the globe.  Spoiler Alert: The answer is less exciting than you think. 

Steve Clowney

February 8, 2012 | Permalink | Comments (0) | TrackBack (0)

The Reverse Mount Laurel Doctrine

The always-interesting Ken Stahl highlights a recent land use case out of New Jersey.  In Sayreville v. 35 Club, the New Jersey Supreme Court held that the first amendment does not necessarily require a  municipality to allow the sitting of adult businesses, so long as adult ventures have adequate access to locations elsewhere in the metro region (even if those locations are across state borders).

Stahl dubs this "the bizarro Mount Laurel Doctrine" and argues that it has the potential to create new red light disctricts. He writes, "Those communities that have permitted land uses deemed undesirable by other communities, perhaps out of a willingness to absorb their fair share, will be branded as red-light districts or ghettos and become dumping grounds for undesirable uses, while those that have guarded their exclusiveness most zealously will get to continue doing so for no better reason than that they always have."

Steve Clowney

February 8, 2012 in Land Use | Permalink | Comments (0) | TrackBack (0)

Property & the First Amendment

This week, Concurring Opinions hosted a online symposium on the relationship between the First Amendment and property.  Specifically, the symposium has explored Marvin Ammori’s article, First Amendment Architecture, and the important concerns that he raises about doctrine and normative theory concerning speech spaces.

Here’s the abstract for Marvin’s article:

The right to free speech is meaningless without some place to exercise it. But constitutional scholarship generally overlooks the role of judicial doctrines in ensuring the availability of spaces for speech. Indeed, when scholarship addresses doctrines that are explicitly concerned with speech spaces such as public forums and media or Internet forums, it generally marginalizes these doctrines as “exceptions” to standard First Amendment analysis. By overlooking or marginalizing these decisions, scholarship has failed to explicate the logic underlying important doctrinal areas and what these areas reveal about the First Amendment’s normative underpinnings.

This Article adopts a different interpretive approach. It identifies and interprets the Court’s role in ensuring, requiring, or permitting government to make spaces available for speech. Across a range of physical and virtual spaces, the Article identifies five persistent judicial principles evident in precedent and practice that require or permit government to ensure spaces to further particular, substantive speech-goals.

Further, rather than quarantining these speech-principles as exceptions to the standard analysis, this Article explores the significance of these principles for “core” speech doctrine and theory. The resulting analysis poses fundamental challenges to conventional wisdom about the First Amendment and the normative principles generally believed evident in doctrine. Consequently, the Article provides timely guidance for legislators and judges, particularly for shaping access to the technology-enabled virtual spaces increasingly central to Americans’ discourse.

Symposium Introduction here.

Commentators posts:

1.  Brett Frischmann: Thoughts on Ammori’s Free Speech Architecture and the Golan decision

2.  Timothy ZIck: Speech and Spatiality

3. Marvin Ammori: First Amendment “Exceptions” and What the First Amendment Means (#2)

4.  Marvin Ammori: Baseline Spaces for Speech

5.  Brett Frischman: One more principle: Nondiscrimination

6.  Marvi Ammori: Legislated Spaces

7.  Marvin Ammori: Access for Diverse & Antagonistic Sources

8.  Timothy Zick: Architectural Trusteeship

9.  Gregory Magaria: Redistinguishing “Ought” from “Is,” or Why I Like the World Less Than Marvin Does

Steve Clowney

February 8, 2012 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 7, 2012

The Law on Lockout Fees

The New York Times addresses lockout fees and other reader questions:

QI got locked out of my unit while moving, and the landlady had her nephew come by to let me in. Now she is charging me a $50 “lockout fee.” The fee isn’t allowed for in the lease, so can she collect it? I’d rather give her a box of chocolates and a “thank you” card.

A: David Kaminsky, a Manhattan lawyer who specializes in landlord-tenant matters, said that if the landlady had genuinely incurred a cost, she would be entitled to recover the amount incurred due to the fault of the tenant. But absent a lease clause addressing the issue, the landlord cannot charge an arbitrary amount as a “lockout fee.”

Steve Clowney

February 7, 2012 | Permalink | Comments (0) | TrackBack (0)

Harris on the History of Condominiums

Douglas Harris (British Columbia) has posted Condominium and the City: The Rise of Property in Vancouver (Law and Social Inquiry) on SSRN.  Here's the abstract:

Condominium is a form of land ownership that combines private ownership of an individual unit in a multi-unit building with an undivided share of the common property in the building and a right to participate in the collective governance of the private and common property. Introduced by statute across North America in the 1960s, condominium facilitated the vertical subdivision of land and enabled a massive increase in the density of private interests. This article describes condominium and considers the justifications that were offered for this rearrangement of property. It then chronicles the introduction of condominium to the city of Vancouver and maps its spread across the city from 1970 to 2010. In doing so, the article reveals that condominium, a legal innovation without peer in its capacity to increase the density of private ownership in land, has provided the legal architecture of ownership for the remaking of Vancouver.

Steve Clowney

February 7, 2012 | Permalink | Comments (0) | TrackBack (0)

Monday, February 6, 2012

The Source of Real Estate Lawsuits

A biennial research report by the National Association of Realtors shows the property disclosure issues account for many of the lawsuits filed by homebuyers against sellers and agents:

Disclosure problems involving underwater owners were deemed the most significant of all legal issues discussed in the 63-page report. . . .Often, according to the report, the upside-down seller "sees no benefit" in giving up any information about the property. And sometimes, because the short-sale process takes so long, the property's condition changes while the contract is pending.

Lenders are blamed for much of the tumult because, as one respondent put it, "they are unresponsive and do not approve transactions in a timely manner." But real estate agents take it on the chin too. Said another respondent: "Too many agents are dabbling in short sales without training and are not properly advising sellers of options and recommending legal counsel."

Steve Clowney

February 6, 2012 | Permalink | Comments (0) | TrackBack (0)

Ten Record Setting Bridges


Budget Travel magazine puts together a fun piece on ten record setting bridges.  The article includes squibs on the longest, tallest, and oldest bridges in the world.

Steve Clowney

[photo: Millau Viaduct, France (1,125 feet high). Courtesy dickdotcom/Flickr]

February 6, 2012 | Permalink | Comments (0) | TrackBack (0)

Schleicher on Land Use Procedure

David Schleicher (George Mason) has posted City Unplanning on SSRN.  Here's the abstract:

Generations of scholarship on the political economy of zoning have tried to explain a world in which tony suburbs run by effective homeowner lobbies use zoning to keep out development, but big cities allow relatively untrammeled growth because of the political influence of developers. Further, this literature has assumed that, while zoning restrictions can cause "micro-misallocations" inside a metropolitan region, they cannot increase housing prices throughout a region because some of the many local governments in a region will allow development. But these theories have been overtaken by events. Over the past few decades, land use restrictions have driven up housing prices in the nation's richest and most productive regions, resulting in massive changes in where in America people live and reducing the growth rate of the economy. Further, as demand to live in them has increased, many of the nation's biggest cities have become responsible for substantial limits on development. Although developers are, in fact, among the most important players in city politics, we have not seen enough growth in the housing supply in many cities to keep prices from skyrocketing.

This paper seeks explain these changes with a story about big city land use that places the legal regime governing land use decisions at its center. Using the tools of positive political theory, I argue that, in the absence of strong local political parties, land use law sets the voting order in local legislatures, determining policy from potentially cycling preferences. Specifically, these laws create a peculiar procedure, a form of seriatim decision-making in which the intense preferences of local residents opposed to re-zonings are privileged against more weakly-held citywide preferences for an increased housing supply. Without a party leadership to organize deals and whip votes, legislatures cannot easily make deals for generally-beneficial legislation stick. Legislators, who may have preferences for building everywhere to not building anywhere, but stronger preferences for stopping construction in their districts, “defect” as a matter of course and building is restricted everywhere. Further, the seriatim nature of local land use procedure results in a large number of "downzonings," or reductions in the ability of landowners to build "as of right", as big developers do not have an incentive to fight these changes. The cost of moving amendments through the land use process means that small developers cannot overcome the burdens imposed by downzonings, thus limiting incremental growth in the housing stock.

Finally, the paper argues that, as land use procedure is the problem, procedural reform may provide a solution. Land use and international trade have similarly situated interest groups. Trade policy was radically changed, from a highly protectionist regime to a largely free trade one, by the introduction of procedural reforms like the Reciprocal Trade Agreements Act, adjustment assistance, and "safeguards" measures. The paper proposes changes to land use procedures that mimic these reforms. These changes would structure voting order and deal-making in local legislatures in a way that would create support for increases in the urban housing supply.

Steve Clowney

February 6, 2012 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)