PropertyProf Blog

Editor: Stephen Clowney
Univ. of Arkansas, Fayetteville

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Wednesday, June 10, 2015

Bronin on Energy Production in Cities

BroninSara Bronin (Connecticut) has posted Energy in the Ecopolis (Environmental Law Reporter) on SSRN.  Here's the abstract:

Climate change, resource scarcity, and environmental degradation demand a paradigm shift in urban development. Currently, too many of our cities exacerbate these problems: they pollute, consume, and process resources in ways that negatively impact our natural world. Cities of the future must make nature their model, instituting circular metabolic processes that mimic, embrace, and enhance nature. In other words, a city must be a regenerative city or, as some say, an “ecopolis.”

So, how to get there — to ecopolis — from here? In this Comment, I propose a partial answer by focusing on certain legal frameworks that must be reenvisioned to enable the ecopolis. Part II defines the ecopolis, drawing on accounts from leading thinkers. It then differentiates between regenerativity and the better-known concept of sustainability. That part also identifies the many facets of regenerativity, including food production, brownfield revitalization, integration with nature, waste management, water use, transportation, building considerations, and energy.

Part III then focuses on one of those facets: energy. The ecopolis must not only use less energy than our cities do today, it also must produce energy in a way that positively contributes to its surroundings. This means taking advantage of new generating technologies that harness renewable resources, such as biomass, sun, and wind, and that cleanly convert trash to energy. In addition, it means embracing distributed generation, located near the end-user it is intended to serve. Distributed generation, whether for individual end-users or for community energy projects, is an essential element of energy in the ecopolis.

June 10, 2015 | Permalink | Comments (0)

Monday, June 8, 2015

Beautiful Buildings Close Up


Slate profiles the photographs of Roland Fischer, who takes disorienting (and stunning) pictures of building facades.

June 8, 2015 | Permalink | Comments (0)

Garnett on Inner Ring Suburban Communities

GarnettNicole Garnett (Notre Dame) has posted Old Suburbs Meets New Urbanism on SSRN.  Here's the abstract:

This essay examines the growing popularity among inner ring suburban communities of new urbanist regulatory tools, including transect zoning and form-based codes. Given the demographic realities facing these communities, the essay raises concerns about the temptation to use legal regulation to "upscale" older suburbs and argues for more-organic, deregulatory approaches to redevelopment. The essay will be included in an edited volume entitled Infinite Suburbia (Alan Berger and Joel Kotkin, eds.).

June 8, 2015 | Permalink | Comments (0)

Smith on Housing Migrant Labour in Ontario

AsmithAdrian Smith (Osgoode) has posted The Bunk House Rules: Housing Migrant Labour in Ontario (Osgoode Hall Law Journal) on SSRN.  Here's the abstract:

The paper tackles the recent controversy surrounding an application to convert an abandoned school into housing for migrant agricultural workers in Ontario, Canada. It examines how the written reactions of community residents to a proposed municipal zoning by-law amendment convey and invoke understandings of the legal regulation of temporary labour migration. When viewed through a legal consciousness analytic lens, reconstituted to attend to the material practices and context underpinning residents’ discursive and ideological responses, what I term a ‘materialist legal consciousness studies’, it is evident that the residents’ submissions intervene in the organization and regulation of agricultural production. While framed in opposition to the proposed amendment and the rules on siting bunk houses, residents’ responses -- which rehearse well-worn, racist colonial tropes -- (re)produce material outcomes affecting the working and social lives of migrant agricultural workers in southwestern Ontario. I argue that residents’ overwhelming opposition to the bunk house proposal re-inscribes and even extends the unfree labour relations and conditions in which these workers toil and dwell. In so doing, residents perpetuate growers’ control not merely of labour power but in fact over racialized labouring bodies, deepening the regulatory immobilization and hyper-exploitation of migrant workers.

June 8, 2015 | Permalink | Comments (0)

Friday, June 5, 2015

An Update on the Law of Signs


Over at Volokh Conspiracy, Eugene Volokh walks through a recent Fourth Circuit case on signs, Central Radio Co. v. City of Norfolk.  The court held that a sign law that exempts governmental and religious emblems (as well as "works of art") is content-neutral.  Volokh thinks the ruling is clearly wrong-headed:

Like Reed v. Town of Gilbert, 707 F.3d 1057 (9th Cir. 2012), cert. granted, 134 S. Ct. 2900 (2014), this should have been an easy case. A sign ordinance is content-based if it “distinguishes … between permissible and impermissible signs … by reference to their content.” Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 516 (1981) (plurality opinion). Norfolk’s sign code imposes size restrictions on some signs, like Petitioner’s, but exempts from regulation (1) “flag[s] or emblem[s]” of foreign and domestic governments and of “religious organizations,” and (2) “works of art.” Norfolk, Va., Code app. A, §§ 2-3; 16-5.2(a)(3), (a)(9).1 Such distinctions are facially content-based. Norfolk’s sign ordinance might not be motivated by disagreement with Petitioner’s ideas or turn on the viewpoint of speech. But under this Court’s precedent, such content classifications make a law content-based, even in the absence of improper legislative motive.

Nevertheless, the Fourth Circuit panel majority treated this facially content-based law as content-neutral — the exact opposite of the result reached by the Eighth Circuit in Neighborhood Enterprises, Inc. v. City of St. Louis, 644 F.3d 728 (8th Cir. 2011), and the Eleventh Circuit in Solantic, LLC v. City of Neptune Beach, 410 F.3d 1250, 1266 (11th Cir. 2005), which dealt with ordinances nearly identical to the Norfolk ordinance. Moreover, the Sixth and Ninth Circuits join the Fourth Circuit in treating similar facially content-based sign ordinances as content-neutral, while the First and Second Circuits join the Eighth and Eleventh Circuits in treating them as content-based.

June 5, 2015 | Permalink | Comments (0)

The Oral Argument Podcast Does Property

University of Georgia Professors Joe Miller and Christian Turner put together a very cool law-themed podcast called "Oral Argument."  Two recent episodes feature property professors talking about their work (and other good things):

Episode 63: A Struggle with Every Single One (guest Jessica Owley): Suppose you wanted to check out how our efforts to save endangered species are going. Our guest, Jessica Owley, tried to do that and to observe what is happening where habitat conservation plans have been put in place. Things didn’t go so well. We discuss the structure of the Endangered Species Act, snails, dams, the God Squad, “incidental take permits,” how it’s all supposed to work, and, mainly, how Jessica was stymied in her efforts to figure out how it actually is working.

Episode 59: Folly Bridges (guests Sarah Schindler and friends): Friend of the show and “Freaks and Geeks” extra Sarah Schindler returns to join us live at Oral Argument World Headquarters to talk about the exclusion we impose not through law but through building and architecture. We make an outdoor party of it with very special guests Paul Heald, Jessica Owley, and Justin Steil. (With so many of us gathered around three microphones, forgive us for a little more unevenness in levels than usual.)

June 5, 2015 | Permalink | Comments (0)

Kochan on Economics-Based Environmentalism

Kochan_DDonald Kochan (Chapman) has posted Economics-Based Environmentalism in the Fourth Generation of Environmental Law (Journal of Environmental & Sustainability Law) on SSRN.  Here's the abstract:

Environmental protection and economic concerns are not mutually exclusive. This article, written for a symposium on "Environmental Law 4.0: Adaptive and Resilient," explores some of the issues of economic analysis that might arise as we approach the fourth generation of environmental law. It explains ways that economic analysis can be employed to generate the best environmental rules, including measures under what this article terms as "economics-based environmentalism."

Economics-based environmentalism contends that the advantages of using economic principles within a “polycentric toolbox” of environmental law come from the benefits available in private ordering, markets, property rights, liability regimes and incentives structures that will better protect the environment than alternatives like state-based interventionist, prescriptive rules that lack the adaptability and tailored effect of economics-based rules. Economics-based environmentalism explains that environmental protection can be accomplished if the government sets rules that allow private markets to price resources, establishes enforceable rights in those resources, and allows individuals to freely trade such rights. To the extent that the state is unwilling to surrender substantial control to private actors and the market, economics-based environmentalism calls for the injection of these economic standards into the development of state-based regulatory law, hoping that those state laws will try to harness the economic ideas.

One proposal in the article calls for embedding in law a more stringent requirement that agencies prove the existence of market failure and the exhaustion of economic alternatives to governmental regulation before being allowed to proceed with any top-down, interventionist governmental regulation. The last portion of the article focuses on theories from law and economics, including those related to the self-perpetuating behavior of bureaucracies, public choice models of legislation and regulation, and capture theory as barriers to any effective reform in the emerging fourth generation of environmental law – whether it be those reforms proposed by others or even those suggested earlier in the article.

June 5, 2015 | Permalink | Comments (0)

Babie on Recent Developments in Australian Real Property Law

Paul-BabiePaul Babie (Adelaide) has posted The Durability of Title: An Appraisal of Recent Developments in Australian Real Property Law on SSRN.  Here's the abstract:

This article considers three recent Australian judicial developments in real property law that remind us just how frail, or lacking in durability, that title may be. In Payne v Dwyer the Supreme Court of Western Australia dealt with the operation of adverse possession to determine whether a co-owner might adversely possess another co-owner in a situation where the co-ownership of the mineral rights was found in a separate title to the land on which the minerals were found. In Willmott Growers Group Inc v Willmott Forests Ltd (Receivers and Managers Appointed) (in liq), the High Court held that the power of liquidators to disclaim leases would extinguish tenants’ proprietary rights; and in Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd, it held that an easement deliberately deleted, even wrongfully, from a Torrens land title register could not be ordered to be reinstated because such a deletion does not constitute an “omission” within the statutory exception to indefeasibility.

June 5, 2015 | Permalink | Comments (0)

Thursday, June 4, 2015

Dyal-Chand on Segregation in American Neighborhoods

Dyal-chandRashmi Dyal-Chand (Northeastern) has posted Housing as Holdout: Segregation in American Neighborhoods (Tulsa Law Review) on SSRN.  Here's the abstract:

How far have people who are not African American gone to keep African Americans out of their neighborhoods? And how far might they go? These are the questions that link the three recent books on housing reviewed in this article: Jeannine Bell, Hate Thy Neighbor: Move-In Violence and the Persistence of Racial Segregation in American Housing; Richard R.W. Brooks and Carol M. Rose, Saving the Neighborhood: Racially Restrictive Covenants, Law and Social Norms; and Douglas S. Massey et al., Climbing Mount Laurel: The Struggle for Affordable Housing and Social Mobility in an American Suburb.

June 4, 2015 | Permalink | Comments (0)

Wednesday, June 3, 2015

The Fight For Control Over the Country's Oldest Synagogue


This story has just about everything: A contested lease, trusts, important American history, and old artifacts. 

A bitter struggle for control over the nation’s oldest synagogue goes to trial this week, with lawyers saying they may use more than 1,000 exhibits dating as far back as 1733. The congregation that worships at the 250-year-old Touro Synagogue in Newport says its very existence is at stake. The congregation that owns it accuses the Newport congregation of lawlessness for agreeing to sell a pair of ceremonial bells valued at more than $7 million.

[...] Dedicated in 1763, the Touro Synagogue sits on a hill in this seaside town of Colonial homes and cobblestone streets. It is a National Historic Site and has been visited by three presidents: George Washington, Dwight Eisenhower and John F. Kennedy.

In the years that followed, Jews left the city, and the synagogue closed. Touro’s contents were transferred to the nation’s oldest Jewish congregation in New York, Congregation Shearith Israel, established in 1654.  In the late 1800s, Jews re-established themselves in Newport and began worshipping there again. Congregation Shearith Israel sent the items back, including two pairs of rimonim, bells placed on the handles of a Torah scroll. They were made by Myer Myers, among the premier silversmiths of the Colonial era.

The question now is who owns the synagogue (and the bells), the congregation in New York or Newport.

June 3, 2015 | Permalink | Comments (0)

Qiao & Upham on Chinese Rural Land Reform

Shitong Qiao (Hong Kong) & Frank Upham (NYU) have posted The Evolution of Relational Property Rights: A Case of Chinese Rural Land Reform (Iowa Law Review) on SSRN.  Here's the abstract:

The most notable, or at least the most noted, form of property evolution has been the transfer of exclusive rights from collectives to individuals and vice versa, such as the farm collectivization in Soviet Union and the establishment of the People’s Communes in Mao’s China and their reversals. Such radical moments, however, constitute only a small part of history. For the most part, property rights evolve quietly and incrementally, which is hard to explain if we take exclusive rights as the core of property, or, to put it more generally, if we are focusing solely on the question of who owns the things. To describe the evolution of property rights in China, we employ the concept of relational property. It is a concept that is heavily influenced by Joseph William Singer’s “social relations model” and Ian Macneil’s “relational contract” and, in particular, their emphasis on the determinative role of social relations in the construction of property and contract rights. The bundle of sticks metaphor is at the heart of relational property because it recognizes that property rights can be, and often are, disaggregated as they adapt to changing social, economic, and technological demands. As we show in the context of the reform of Chinese rural land, the combination of the metaphor of separable interests — the sticks in the bundle — and the dependence of property interests on social relationships can explain the evolution of property rights more accurately than a perspective that stresses a single central meaning of property.

June 3, 2015 | Permalink | Comments (0)

Tuesday, June 2, 2015

Top SSRN Downloads

In honor of the beginning of the month, here are the most downloaded property articles on SSRN over the last 60 days. 

1. [167 downloads]  The Validity of Restraints on Alienation in an Oil and Gas Lease
     Luke Meier (Brown) & Rory M. Ryan (Baylor)

2. [165 downloads]  When the Shale Gale Hit Ohio: The Failures of the Dormant Mineral Act, Its Heroic Interpretations, and Grave Choices Facing the Supreme Court
     Fenner L. Stewart (Calgary)

3. [128 downloads]  Architectural Exclusion: Discrimination and Segregation Through Physical Design of the Built Environment
     Sarah Schindler (Maine)

4. [112 downloads]  What is Property Law?
     Eveline Ramaekers (Oxford)

5. [103 downloads]  The Institutions of Roman Markets
Benito Arruñada (Pompeu Fabra)

6. [102 downloads]  Legal Institutionalism: Capitalism and the Constitutive Role of Law
     Simon Deakin (Cambridge), David Gindis (CBR), Geoffrey M. Hodgson (Hertfordshire), Huang Kainan (Hertfordshire), & Katharina Pistor (Columbia)

7. [82 downloads]  Open Space in an Urban Area: Might There Be Too Much of a Good Thing?
Robert C. Ellickson (Yale)

8. [82 downloads]  Digital Assets and Fiduciaries
Naomi Cahn (George Washington), Christina L. Kunz (William Mitchell), & Suzanne Brown Walsh (Independent)

9. [74 downloads]  Taking Turns
     Ronen Perry (Haifa) & Tal Zarsky (Haifa)

10. [68 downloads]  Patent Licensing and Secondary Markets in the Nineteenth Century
      Adam Mossoff (George Mason)

June 2, 2015 | Permalink | Comments (0)

AALS Call For Papers

The AALS Sections of State and Local Government Law, Property Law, and Art Law are co-sponsoring a panel discussion, Infraculture and Public-Private Partnerships: Legal Tools for Economic Recovery and Community Development, to be held during the AALS Annual Meeting in New York City, on Thursday, January 7, 2016, from 1:30 -3:15 p.m.  

 A brief description of the panel topic is below.  The program will consist of four panelists, with time dedicated to audience participation. The co-chairing sections of Property Law, State and Local Government Law, and Art Law will invite three of the panelists. One panelist will be selected from this Call for Papers.

The sponsoring section chairs are currently accepting abstracts or draft papers on the topic.  The subject line for submissions should read:  AALS Infraculture and P3.  Submissions should include the author’s name, affiliation, and full contact information.  Abstracts or draft papers should be sent to Professor Kristen Barnes, or Professor Cynthia Baker, by 9 pm on Monday, June 8th.

The idea for this panel is inspired by Detroit’s strategy of leveraging its art museum collection to raise money to facilitate the city’s emergence from bankruptcy. By way of background, since 1919 Detroit owned the Detroit Institute of Art with its collection valued at approximately $4.6 billion. Although at times the integrity of the art collection was threatened, Detroit made the case to public and private communities for maintaining the collection intact. In response, the State of Michigan, private entities, and foundations (e.g., the Ford Foundation, Kresge Foundation) pledged money so that the city did not have to sell part of the collection to help pay the $18 billion debt. Under the restructuring plan, the ownership of the museum and its collection were transferred from the city of Detroit to an independent charitable trust.

Drawing upon the dynamic concept of infraculture this panel explores creative legal approaches that have emerged to revitalize and redevelop metropolitan areas relying upon cultural assets. Public/Private partnerships, various forms of ownership such as communal ownership, stewardship, and trusts are examples of some of the vehicles governments have adopted for generating revenue and incentivizing investment to address preserving and restoring iconic structures of metropolitan areas (e.g., historic buildings, theaters, and opera houses). Whether referring to art museum collections, specially commissioned art works, alternative expressions of art such as graffiti, symphonies, dance companies, film festivals or the buildings and other venues that house them --- a city’s cultural property defines it. Cultural property is also a means to achieve urban recovery. In exploring this idea, the panel encompasses considerations of: How are property and conceptions of public and private redefined when art is placed at the center of a redevelopment strategy? What innovative solutions do property law, state and local government law, and art law offer to accomplish economic recovery and community development? How are the new arrangements of governance and financing structured?

June 2, 2015 | Permalink | Comments (0)

Friday, May 29, 2015

The Great Senior Sell Off

What happens when all those aging baby-boomers finally decide to sell their large homes and move into smaller properties (or retirement communities)?  Arthur Nelson, director of the Metropolitan Research Center at the University of Utah, sees a looming disaster:

“They will want to sell their homes, and they’re hoping there are people behind them to buy their homes,” says Nelson . . . He expects that in growing metros like Atlanta and Dallas, those buyers will be waiting. But elsewhere, in shrinking and stagnant cities across the country, the story will be quite different. Nelson calls what’s coming the “great senior sell-off.” It’ll start sometime later this decade (Nelson is defining baby boomers as those people born between 1946 and 1964). And he predicts that it could cause our next real housing crisis.

Roughly 7 percent of over-65 households move each year, and as people get older, their likelihood of moving from owning to renting gets higher and higher (it’s about 79 percent for households over 85). By 2020, there were will be around 35 million over-65 households in the U.S. That year, Nelson calculates, seniors who would like to become renters will be trying to sell about 200,000 more owner-occupied homes than there will be new households entering the market to buy them. By 2030, that figure could rise to half a million housing units a year. “Between changing preferences and declining median household income because of poor education – because we’re not willing to spend money on education,” Nelson says, “that means we can predict the next housing crash, and that’ll be in about 2020.”

May 29, 2015 | Permalink | Comments (0) | TrackBack (0)

Owley on Keeping Track of Conservation

OwleyJessie Owley (Buffalo) has posted Keeping Track of Conservation (Ecology Law Quarterly) on SSRN.  Here's the abstract:

Throughout the world, governments require land protection in exchange for development permits. Unfortunately, oftentimes scant attention has been paid to these land protection programs after development. Agencies and permit applicants agree on mitigation rules, but there appears to be little follow-up. When we do not know where conservation is occurring and cannot determine the rules of mitigation projects, the likelihood that they will be successful or enforced diminishes. I journeyed to California in search of answers by tracing four mitigation plans associated with the Federal Endangered Species Act. While I anticipated some difficulties, the tale is more alarming than expected. The government entities involved struggled to locate and understand the permits themselves, let alone the details of the compensatory mitigation projects. A common land protection tool in this context is the conservation easement. These exacted conservation easements exchange public goods for private gain. Attempting to locate and understand these mitigation easements revealed pervasive problems with tracking mitigation in the United States. The federal agencies had trouble finding and understanding records. The county offices charged with recording property restrictions often had inadequate records of land use restrictions. These challenges exacerbate the accountability and enforceability concerns already associated with mitigation programs. Such uncertainty calls into question this method of environmental conservation. This Article highlights pressing concerns with our current mitigation paradigm and calls for reform of federal programs through promulgating new regulations and updating agency guidance. Furthermore, this project calls upon citizens and researchers to turn their eyes to mitigation programs generally and to question whether such programs truly compensate for the environmental harms they facilitate.

May 29, 2015 | Permalink | Comments (0) | TrackBack (0)

Thursday, May 28, 2015

Barros Named Dean at Toledo

It fills me with joy to report that Ben Barros, founder of this blog, will become The University of Toledo College of Law’s next dean.  Hearty congratulations to Dean Barros.  Well earned. 

Toledo's press release is here.

May 28, 2015 | Permalink | Comments (0) | TrackBack (0)

Chen on the Evolution of Property Rights in China

ChenWeitsengWeitseng Chen (Singapore) has posted Arbitrage for Property Rights: How Foreign Investors Create Substitutes for Property Institutions in China (Washington International Law Journal) on SSRN.  Here's the abstract:

This article revisits the prevailing wisdom regarding property rights based on empirical research on the behavior of foreign investors in China. The Property Law did not exist in China until 2007 — four years after China replaced the United States as the most popular foreign direct investment destination worldwide. This seems to contradict the conventional wisdom about the indispensable role of property rights in economic growth. This article argues that China’s experiences in fact do not overrule the orthodox view, but rather shed light on the evolution of the regulatory property regime. Property rights still matter in China, but the structure of property institutions deviates from conventional configurations. Focusing on land tenure, this article demonstrates an institutional substitute strategy adopted by foreign investors to fulfill their institutional needs. This article also identifies the specific forms of substitutes for property rights and conceptualizes two general approaches to establishing such substitutive property institutions — the contract and corporate law approaches. The findings show that the bifurcated notions of “formal/informal” or “property/non-property” institutions cannot characterize the dynamic evolution of property rights in China. Unlike the image conveyed by informal institutions, foreign investors do not operate their businesses under the shadow of law but beyond the shadow of law by piggybacking on various regulatory regimes and areas of law. Nonetheless, the institutional substitute as a development strategy may facilitate economic growth but will not be sustainable in the long term if it fails to address structural problems caused by accelerating changes in market conditions.

May 28, 2015 | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 27, 2015

Why Didn't the Germans Bomb Big Ben During WWII?


Short answer: They tried but luck intervened. 

Quora has a longer take on the mechanics of WWII bombing.  The rub:

At the time of the Blitz, the Germans, like every air power, did not have the ability to specifically target key buildings through high-altitude bombing raids, which were themselves necessary to hit valuable targets in order to avoid intense anti-aircraft fire. That combination of factors resulted in the reliance on city-flattening, strategic bombing raids: Just drop a bunch of bombs from where the guys on the ground can't hit you and hope for the best.

May 27, 2015 | Permalink | Comments (0) | TrackBack (0)

Wiseman on the Oil and Gas Commons

HwisemanHannah Wiseman (Florida State) has posted Coordinating the Oil and Gas Commons (BYU Law Review) on SSRN.  Here's the abstract:

Oil and gas development involves many configurations of property rights and regulations that lead to commons-type challenges. Numerous mineral owners have rights to drain oil and gas from shared underground reservoirs, and mineral owners in many states may use the surface to access minerals without paying surface owners any damages. These mineral owners also use underground resources in a manner that precludes or enhances certain future subsurface uses, such as natural gas and carbon dioxide storage, geothermal development, or other mineral development. Drilling an oil or gas well can also prevent future surface use — for example, many municipalities in Texas prohibit building on top of or within a certain number of feet of an abandoned well. Yet potential future surface and subsurface users often have no voice in the decision to drill. Within the regulatory sphere, local, state, regional, and federal governments have some voice in oil and gas governance, yet none exercise full regulatory authority over the externalities caused by this development, leading to a type of regulatory commons in which numerous actors have partial control over a regulated activity but leave certain gaps.

This Article explores this complex array of rights and regulations from a commons-based perspective and suggests solutions. To allow oil and gas development while avoiding inefficient externalities, more types of property owners should have individually-defined rights to the subsurface resource and should be able to negotiate with mineral owners; surface owners should receive damages for mineral owners’ use of the subsurface; or the rule of capture, which allows for rapid extraction of oil and gas from a common pool and potential over-use of valuable land at the surface, should be modified. In the regulatory sphere, the Article suggests that local, state, regional, and federal actors all need a say in the regulatory process — thus pushing back against the trend to preempt local involvement — but that the federal government should play more of a coordinating role, identifying gaps that need filling.

May 27, 2015 | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 26, 2015

Is Title Insurance a Scam?


The New York Times details the battle over the industry's shenanigans:

It is no secret . . . that many borrowers are overcharged for title insurance. In 2007, the Government Accountability Office warned that the price of title policies was inflated by lack of competition in the title-insurance market, as well as apparently illegal kickbacks paid by title agents to realtors, mortgage brokers, loan officers and others who sent business their way.

The 2010 Dodd-Frank law called for cleaning up title insurance, and, in 2014, regulators from the Consumer Financial Protection Bureau issued a rule to carry out the law. Basically, the rule created a safe harbor from liability for regulatory violations, but only for loans with closing costs of less than 3 percent of the total loan, including fees to title companies affiliated with lenders. In effect, the rule uses market incentives to limit title costs by offering lighter regulation in exchange for keeping costs down.

Congress is resisting. A bipartisan majority in the House recently passed a Republican bill to exclude title fees from the calculation that determines the level of regulatory scrutiny. The White House has threatened a veto. But, in the Senate, Republicans could add the bill to other legislation that Democrats may want.

May 26, 2015 | Permalink | Comments (0) | TrackBack (0)