Sunday, September 11, 2016

Zasloff on the Clash between Land Use and Fair Housing

ZasloffJonathan Zasloff (UCLA) has posted The Price of Equality: Fair Housing, Land Use, and Disparate Impact (Columbia Human Rights Law Review) on SSRN. Here's the abstract:

What happens when local government policies run head-on into federal civil rights laws? Nowhere does this question assume greater importance than with land use and fair housing, yet in the nearly half-century since the passage of the Fair Housing Act (FHA), courts and commentators have skirted the question. With the Supreme Court’s recent decision in Inclusive Communities Project v. Texas, the most significant fair housing decision in the nation’s history, they can no longer do so. This Article represents the first sustained effort to show how the FHA affects land use, the most important power that cities have under American localism. The Supreme Court held for the first time that the FHA allows disparate impact liability, and outlined when such disparate impact cases can be brought. But it left many crucial questions unanswered, and this Article attempts to fill the gap. It concludes that when cities restrict affordable and multifamily housing, which often has a disparate impact on people of color, zoning ordinances must withstand intermediate scrutiny in order to be sustained. Courts must balance local policies with demands for inclusion: sometimes those policies will triumph, but in many instances they will not, for they rest on weak empirical or legal foundations, or they can be addressed in less restrictive ways. The Article sets forth a series of the most common scenarios and justifications for exclusionary zoning, and seeks to show that such justifications have far less purchase than is commonly supposed. The FHA comes nowhere close to abolishing zoning, but it does insist that local zoning must no longer exclude racial minorities, and the Court’s decision makes clear how fair housing advocates can and should use the law to fight such exclusion. If localities no longer have the discretion to exclude people of color, then that is the price of equality.

September 11, 2016 in Home and Housing, Land Use, Real Estate Transactions, Recent Cases, Recent Scholarship | Permalink | Comments (0)

Tuesday, September 6, 2016

Stein on Chinese Real Property Law and Practice

Stein-GregGregory Stein (Tennessee) has posted Chinese Real Estate Law and the Law and Development Theory: Comparing Law and Practice (Florida State Journal of Transnational Law & Policy) on SSRN. Here's the abstract:

China did not adopt a modern Property Rights Law until 2007, which means that most modern real estate development occurred before there was a comprehensive property law to govern it. Moreover, business conventions in China frequently diverge from published laws, and the rules that professionals follow do not always comply with legal requirements. This article addresses how real estate professionals in China contend with these legal inconsistencies and uncertainties. It also asks whether China is disproving the traditional law and development model, which holds that transparent property and contract laws are a prerequisite to robust economic development.

Part II introduces some of the common Western misconceptions about Chinese real estate law and business. Part III presents examples of how three specific Chinese business practices have come to differ in significant ways from Chinese real estate law. Part IV concludes by noting the ways in which China calls into question the widely accepted model of law and development.


September 6, 2016 in Articles, Real Estate Finance, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Friday, September 2, 2016

Illegal Property Tax Foreclosures in Detroit

Atuahene_Bernadette_portraitCheck out this really fascinating (and disturbing) article about research conducted by Bernadette Athene (Chicago-Kent, currently visiting at Chicago) on illegal property tax foreclosures in Detroit:

This week was the 11th anniversary of Hurricane Katrina.  Over the years, many have said that Detroit is experiencing a hurricane without water.

Like with Katrina, the property tax foreclosure crisis in Detroit has wiped out entire neighborhoods inhabited by poor and working-class black people. From 2011-15, the Wayne County treasurer foreclosed upon approximately one in four Detroit properties for nonpayment of property taxes.

In fact, Detroit has one of the highest number of property tax foreclosures any American city has had since the Great Depression. Most important, once foreclosed properties are vacated, they are often vandalized, burned down or stripped of all valuable materials, creating a flood of blighted properties that decimate communities by reducing property values, attracting crime and causing those who can to evacuate.

There is a debate about the origins of Detroit’s property tax foreclosure crisis.

Popular narratives have focused on a culture of lawlessness in which property owners have cheated the city by not paying their property taxes and then devising ways to avoid foreclosure.

Some have welcomed the record number of property tax foreclosures as a sign that Detroit, at long last, is establishing law and order. But, I recently co-authored a study titled “Stategraft” that demonstrates that Detroit’s unprecedented property tax foreclosure rate is indefensible because property tax assessments in Detroit are, in fact, illegal.  

Michigan’s  Constitution clearly decrees that a property’s assessed value cannot exceed 50% of its market value. In our study, we find that Detroit’s assessor is flagrantly violating this vital state constitutional provision. Consequently, contrary to popular narratives, it is the city that is stealing from Detroit property owners through illegal assessments and inflated property tax bills, and not the other way around. And while the city has reassessed properties during the last two years, those actions have not been enough to bring most assessments in line with the Michigan Constitution. 

To investigate whether property tax assessments in Detroit are illegal, we use citywide property sales and assessment data for 2009-15. As required by Michigan case law and statute, we included only arm’s length transactions in our analysis, and we find that, in 2009, 65.5% of the properties sold violated the state constitutional assessment limit.  In subsequent years the numbers were equally shocking: 2010 (84.7%), 2011 (54.6%), 2012 (71.4%), 2013 (78.2%), 2014 (83.2%), 2015 (64.7%).

The property tax assessments were not only above the legal limit, but they also exceeded it by a substantial sum. For instance, in 2010, assessments were, on average, 7.3 times higher than the legal limit. In 2015, assessments were, on average, 2.1 times higher than the legal limit.

In all years studied, the illegality was most pronounced for lower-valued properties. That is, the city is more likely to assess modest homes at illegal levels than it is more expensive homes, leaving the most vulnerable homeowners drowning in injustice. 

Detroit’s mayor, Mike Duggan — a former prosecutor — acknowledged that “for years, homes across the city have been over assessed,” and tried to remedy this in 2014 and 2015 by implementing assessment decreases for most of the city, ranging from 5% to 20%.

Our study shows that illegal property tax assessments nevertheless persist for lower-valued properties despite these reductions. For example, in 2015, properties with the lowest values were, on average, assessed at 4.8 times the legal limit, while properties with the highest values were, on average, legally assessed.

Both before and after Duggan’s assessment reductions, those who can afford only modest properties have been subject to the most severe illegality and forced to endure the consequences of Detroit’s broken levees.

In July, the American Civil Liberties Union of Michigan, the NAACP Legal Defense Fund and the law firm of Covington & Burling filed a class action  alleging that the unprecedented number of property tax foreclosures in Detroit is unlawful on several counts, including the fact that the property tax assessments systematically violate the state constitution and the Fair Housing Act. The findings of "Stategraft" strongly support this claim.

The end goal of the class action is to stop all property tax foreclosures that are based upon illegal assessments. As an interim measure, the legal team recently filed a motion for a preliminary injunction that would place a moratorium on property tax foreclosures of owner-occupied properties in Detroit and throughout Wayne County.

To be sure, by reducing city revenues, a moratorium would further wound a city that has been in economic decline for decades and is desperately trying to emerge from the shadow of the largest municipal bankruptcy in our nation’s history. But, just as we do not allow homeless people in desperate need to burglarize homes, we should not allow the City of Detroit to use unlawful assessments and inflated property tax bills to steal money from Detroit property owners. Additionally, the requested moratorium is narrowly tailored so that it protects only vulnerable homeowners and not investors. 

Given the mortgage foreclosure crisis, water shutoffs and historic bankruptcy, the people of Detroit have already had to weather several devastating storms. Now that they are facing a hurricane without water, the federal government cannot leave Detroiters stranded.

Attorney General Loretta Lynch must ensure that the Housing and Civil Enforcement Section of the Department of Justice opens an official investigation, which will supplement the ongoing class action and begin to quell the tides of inequity.

Bernadette Atuahene is a visiting professor at the University of Chicago Law School and a research professor at the American Bar Foundation.

September 2, 2016 in Articles, Home and Housing, Mortgage Crisis, Real Estate Transactions, Recent Scholarship, Recording and Title Issues, Takings | Permalink | Comments (0)

Monday, August 22, 2016

Eagle on the Socioeconomics of Affordable Housing

EagleSteven J. Eagle (George Mason) posted Conflation, Intractability and Affordable Housing (Fordham Urban Law Journal) on SSRN. Here's the abstract:

This Article examines the varying and often-conflicting views of “affordable housing” of different social and economic groups. It asserts that attempts to deal with affordable housing issues must take into account the shelter, cultural, and economic needs of those populations, and also the effects of housing decisions on economic prosperity. The article focuses on affordable housing goals such as making available an ample supply of housing in different price ranges; attracting and retaining residents who contribute to the growth and economic prosperity of cities; ensuring that neighborhood housing remains available for existing residents, while preserving their cultural values; and providing adequate housing in high-cost cities for low- and moderate-income persons and the overlapping concern for “fair housing” for families of all races and backgrounds.

Thereafter, the Article examines the benefits and detriments of various means of providing more affordable housing, including fair-share mandates, rent control, and inclusionary zoning (including whether that leads to impermissible government takings of private property). It then briefly considers the merits and demerits of federal subsidy programs.

The Article briefly considers conceptual and practical problems in implementing the Supreme Court’s 2015 Inclusive Communities disparate impact holding, and HUD’s 2015 regulations on “Affirmatively Furthering Fair Housing.” Finally, it discusses how the concept of “affordable housing” conflates the separate issues of high housing prices and poverty, and how housing prices might be reduced through removal of regulatory barriers to new construction.

Throughout, the Article stresses that advancing affordable housing goals have both explicit and implicit costs, and that goals often are conflicting. To those ends, it employs economic and sociological as well as legal perspectives.

August 22, 2016 in Home and Housing, Law & Economics, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Wednesday, August 17, 2016

#LouisianaFlood: Property Law and Consumer Protection After a Natural Disaster

(Photo Credit: The Millennium Report)

As national news is just getting around to reporting, Baton Rouge and its surrounding areas recently experienced tremendous flooding. Large portions of southeast Louisiana were (and many remain) underwater. Our tax law friends over at the Surly SubGroup, specifically Phil Hackney (LSU), summarize the situation nicely:

The devastation stretches from around the Louisiana-Mississippi border all the way over to Lafayette -maybe 100 miles across. This story does a nice job explaining the weather phenomenon that caused this massive flood event. Neighborhoods that have never flooded before in our recorded history are under 4 -6 ft. of water, and some higher than that. Almost the entirety of certain cities are submerged. The last data I had for my area is that 20,000 were displaced and 10,000 in shelters. I expect that number to go up over the week. Even though it has stopped raining, the flood waters cannot drain because the rivers are too high and cannot take runnoff from tributaries.

For those who may find this helpful, this short post talks a little about the property law (specifically related to home mortgage obligations and homeowners’ insurance) that victims of natural disasters like the Louisiana flooding should keep in mind.


After a disaster like the flooding in Louisiana it is important to get in touch with your bank or mortgage servicer to obtain relief. The reason for this is because even if your property is destroyed and/or you can no longer live in the home, the mortgage debt does not go away. It is still owed even if the improvements on the real estate are not longer habitable. If contacted, however, sometimes the mortgage company will give you more time to pay your monthly note and even dispense with late fees or penalties. Also, if the home has been lost due to substantial or total destruction, you’ll want to talk to your mortgage servicer ASAP to prevent or postpone foreclosure on the property. For private loans (i.e., not government-backed) it will be up to the lender and you to work out those details. Be aware that even if the lender gives you a forbearance for a period of time, you will still have to make up those payments later.

For those loans that are FHA-backed, borrowers are sometimes eligible for resources that allow them to remain in the home. The FHA has a disaster relief policy pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act where, if (1) you or your family live in a federally-declared disaster area; (2) you are a household member of someone who is deceased, missing, or hurt because of the disaster; or (3) your ability to pay your mortgage is significantly impacted by the disaster, then your lender cannot foreclose on its mortgage for a 90-day period. The FHA also strongly advises its participating lenders to work with mortgagees who are affected by natural disasters (for example, by taking a deed in lieu of foreclosure if appropriate or allowing only partial payment for a period of time). This is why it’s so important that homeowners in these flooded areas contact their mortgage servicers and let them know that they qualify for FHA Disaster Relief. For additional help in this process, HUD has a counseling hotline to call at 1-800-569-4287 or you can contact HUD's National Servicing Center.


With regard to property insurance, dealing with your insurer can be a long and complicated process after a natural disaster. The important part is knowing what your declaration and your policy states, and whether flood insurance is included (i.e., for damage caused from rising waters). A general homeowner’s policy only covers damage caused by wind, rain, hail etc. Flood damage is insured separately. The exclusions portion of the policy will help in making this determination.

When it comes to actually getting money for lost or damaged property, different insurance policies take different approaches. You can either obtain the replacement cost value of the property (which means the insurance company will give you funds necessary to substitute the damaged or lost property with comparable property) or actual cash value (which is where you receive the cash value of the property that was lost or damaged, minus depreciation over time). The insurance policy will reveal to which you are entitled.

In the case of personal property losses specifically, this is generally referred to as the insurance of “contents” of the home. Documenting these losses are particularly important (so don’t start throwing things away too quickly). Keeping receipts are also critical to submitting a successful claim.

Another important aspect of property insurance is the fact that you are not the only person insured. Your mortgage bank is also listed as an insured on your policy, which means that when the insurance company send the check the bank will also be listed as a payee. Usually your residential mortgage contract requires that you send the check to the bank and then, through an escrow and release process, the funds will be distributed to you to pay contractors to repair the home in tranches. This means that you and your mortgage bank will have to work together to get the repairs completed and your contractors paid. Another option can be to actually pay off the mortgage debt altogether (if there’s a sufficient amount), but that is a decision that the mortgage lender gets to make. As a homeowner you should try to find out how the mortgage lender will use the insurance proceeds because if the mortgage debt is paid off that leaves you with no money to make repairs to your home.

August 17, 2016 in Home and Housing, Land Use, Natural Resources, Personal Property, Real Estate Finance, Real Estate Transactions, Recording and Title Issues | Permalink | Comments (0)

Thursday, July 21, 2016

Weiss on Housing Tax Credits and Residual Value

Website PictureBrandon M. Weiss (UMKC) has posted Residual Value Capture in Subsidized Housing (Harvard Law & Policy Review) on SSRN. Here's the abstract:

This Article argues that our primary federal subsidized housing production program, the Low-Income Housing Tax Credit (LIHTC), will result in the unnecessary forfeit of billions of dollars of government investment and the potential displacement of tens of thousands of households beginning in 2020 when LIHTC property use restrictions start to expire. The LIHTC example is presented as a case study of an inherent dynamic of public-private partnerships—namely, the potential capture by for-profit providers of “residual value.” For purposes of this Article, this is value generated by a public-private transaction that is unnecessary to incentivize a private provider to deliver the contracted for good or service. 

Drawing on corporate organizational theory, which has highlighted the role that nonprofits play in solving certain contract failures and generating positive externalities, the Article argues that, in certain contexts, partnering with nonprofit providers can be an effective approach to increasing the share of residual value that flows to public purposes. The LIHTC program is one such context, given that a nonprofit preference results in a three-sector approach whereby the federal government provides tax credits to nonprofit developers that must attract private investor equity. This framework leverages institutional strengths, including the access to capital of government, the relative fidelity to public purposes of nonprofits, and the market-based underwriting and oversight of for-profit investors.

July 21, 2016 in Home and Housing, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Thursday, July 7, 2016

DeBarbieri on Community Benefits Agreements

Edward_debarbieriEdward W. De Barbieri (Brooklyn Law School) has posted Do Community Benefits Agreements Benefit Communities? (Cardozo Law Review) on SSRN. Here's the abstract:

Community Benefits Agreement (CBA) campaigns and public discussions about community benefits are becoming the norm in deciding how large urban projects are built outside of formal public land use approvals. CBAs have revolutionized land use approvals for large, public-private economic development projects: now developers and coalitions representing low-income communities can settle their disputes before formal project approval. As a result, CBAs are now commonplace nationwide.

Legal scholarship, however, has failed to keep up with these important developments. This Article aims to do just that by examining how CBAs, when properly negotiated, lower transaction costs, enhance civic participation, and protect taxpayers. It argues that CBAs achieve all these outcomes well, and more efficiently than existing government processes. Indeed, this Article’s central argument is that to the extent that scholars have analyzed CBAs, their analyses have gone astray by either dismissing CBAs as harmful to communities or by focusing on the role of the state in negotiating what really should be a private contract between a coalition of community groups and a developer. It is a mistake to give the state’s role in CBAs primacy over the community coalition because the inclusion of government in the CBA bargaining process creates a host of constitutional protections for developers — namely that the community benefits must be connected to and proportional with the instant government approval.

This Article places focus back on CBAs as private contracts enforceable by inclusive and representative community coalitions. It presents a case study of a successful CBA negotiated for the development of the Kingsbridge National Ice Center in the Bronx. This Article proposes a framework for assessing the impact of CBAs in economic development — one that recognizes the nuanced role that states and municipalities play in the formation and enforcement of CBAs. The framework focuses on the extent to which CBAs (1) lower transaction costs by effectively resolving disputes among developers and community groups, (2) increase civic participation in public processes, (3) protect taxpayers, and (4) avoid government intervention and constitutional protections for developers. This Article concludes with recommendations for the appropriate, limited role of government in CBA negotiations.

July 7, 2016 in Home and Housing, Land Use, Landlord-Tenant, Real Estate Finance, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Friday, July 1, 2016

Roark gives TED Talk on Development and Human Impact

RoarkMarc Roark (Savannah) recently gave a TED Talk on his article Human Impact Statements (Washburn Law Journal). Here's the abstract from SSRN:

When a city undertakes a development project, low income and homeless persons face risks of expulsion. Public and private developers often target low-income neighborhoods and public lands because those spaces are viewed as economically more attainable or available for development. Moreover, the legal system's preference to treat disputes as individual entitlement claims tends to relegate disputes to broad questions of entitlements rather than unpacking the impacts that property changes have on the vulnerable populations. Whether by gentrification or by enhancement of city infrastructure, developer decisions disrupt what are already unstable living environments by imposing increased costs of relocation. These changes also destabilize community relationships by separating individuals and families from their support networks, local transportation options, and local employment that they have come to rely on. In short, low-income and homeless persons find themselves even more destabilized when public and private development projects force their evacuation from where they live. This article argues that though development may be necessary, it should not be undertaken without more serious evaluation of the human impacts in relation to the space. Such evaluations should include the impact on communities, employment, education, and environment for impacted persons. Importantly, failure to take notice of these impacts continues to promote cycles of poverty that plague American cities.

Drawing on similarities in the environmental context, the article argues that a NEPA-like approach to human housing can offset externalities that homeless persons and those living in low-income housing are forced to internalize through environment changes. Amongst those impacts are the imbalance between the well-funded developer and low income populations; the view that low income properties can be classified as nuisance-type properties; and the tendency to only consider the highest best use of property as the rationale for development. The article concludes by offering model legislation that could be implemented to provide a NEPA like assessment to city development.

And here's his TED Talk. Good job, Marc!


July 1, 2016 in Home and Housing, Law Reform, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Monday, May 9, 2016

RPTE Professors' Corner: Law and Public Art


Professors’ Corner's FREE monthly webinar featuring a panel of law professors, addressing topics of interest to practitioners of real estate and trusts/estates.
Sponsored by the ABA Real Property, Trust and Estate Law Section Legal Education and Uniform Laws Group

Tuesday, May 10, 2016
12:30 p.m. Eastern/11:30 a.m. Central/9:30 a.m. Pacific
A Lawyer’s Guide to the Law of Public Art


Tyler T. Ochoa, Professor of Law, High Tech Law Institute, Santa Clara University School of Law

Anthony L. François, Senior Staff Attorney, Pacific Legal Foundation, Sacramento, CA

Moderator: Christopher K. Odinet, Assistant Professor of Law, Southern University Law Center

The use of art in public spaces has captivated the minds of federal, state, and local policymakers in recent years, with some cities even requiring that private developers include public art in all new projects. Moreover, ownership of public art has drawn the attention of lawyers and advocates, particularly when it comes to competing property and management rights between the public, the artist, landowners, and interested third parties. This program begins with an overview of the intellectual property rights in connection with public art, explaining the differences between the rights in the intangible work and the rights in the physical object itself. The program continues with a case study of the City of Oakland's art requirement for private real estate developers, exploring the property and related legal issues that surround such regimes.

Register for this FREE webinar by clicking here


May 9, 2016 in Home and Housing, Land Use, Law Reform, Miscellaneous, Real Estate Transactions, Recent Cases, Takings | Permalink | Comments (0)

Monday, May 2, 2016

Wen on Chinese Land Sales and American Property Law

WeiwenWei Wen (University of New England) has posted How American Common Law Doctrines May Inform Mainland China to Achieve Certainty in Land Sale Contracts (Asian-Pacific Law & Policy) on SSRN.  Here's the abstract:

This paper explores one of the most significant problems confronting Mainland China in relation to contract and property law today, which is, whether or not written form is mandatory for land sale contracts. In practice, Chinese courts have delivered contradictory cases in relation to contractual form. Some courts regard the written form as being mandatory and therefore no contractual remedies are available to enforce oral land sale contracts. In contrast, other courts hold the opposite view that oral contracts may still have some degree of contractual effect. This results in uncertainty throughout Mainland China, which may cause injustice and unfairness to claimants and may undermine the authority of the law and the courts. This paper argues that the solution to the problem is to propose a legal reform initiative to articulate that written form is mandatory for land sale contracts. This initiative will end the contradictory cases and ensure claimants are treated equally at law in this particular matter.

In order to support and underpin the legal reform initiative, this paper utilizes American doctrines to enrich the Chinese literature and draws on the American experience (particularly Professor Lon Fuller's and Professor Karl Llewellyn's analysis) in establishing that written form is desirable for land sale contracts in Mainland China. This is through a comparative law approach known as functionalism that examines the similarities and differences of the compared jurisdictions.

May 2, 2016 in Estates In Land, Law Reform, Real Estate Finance, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0)

Thursday, April 28, 2016

A Look at the Latest Mortgage Foreclosure Data: On the Rise

(Source: TRACReport)

The Transactional Records Access Clearinghouse (TRAC), housed at Syracuse University, is a super helpful organization that I've used for a number of years now. The group issues TracReports that provide free monthly information on, among other things, civil litigation throughout the U.S. federal district courts. One item of interest that the group reports on deals with the number of new foreclosure filings each month. Check out this latest report:

The latest available data from the federal courts show that during March 2016 the government reported 505 new foreclosure civil filings. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this number is up 12.7 percent over the previous month when the number of civil filings of this type totaled 448. The comparisons of the number of civil filings for foreclosure-related suits are based on case-by-case court records which were compiled and analyzed by TRAC (see Table 1). 

When TRAC last reported on this matter, foreclosure lawsuits had declined from a peak reached in May and June of 2012 but seemed to have bottomed out in January 2014. Indeed, as can be seen in Figure 1, the monthly count remained relatively stable from that point until about a year ago. When foreclosure civil filings for March 2016 are compared with those of the same period in the previous year, their number was up by nearly one third, or 32.7 percent. Filings for March 2016 are still substantially lower than they were for the same period five years ago however. Overall, the data show that civil filings of this type are down 25.1 percent from levels reported in March 2011.

Top Ranked Judicial Districts

Relative to population, the volume of civil matters of this type filed in federal district courts during March 2016 was 1.6 per every million persons in the United States. One year ago the relative number of filings was 1.1. Understandably, there is great variation in the per capita number of foreclosure civil filings in each of the nation's ninety-four federal judicial districts. Table 2 ranks the ten districts with the greatest number of foreclosure lawsuits filed per one million population during March 2016.

  • The District of Nevada — with 15.9 civil filings as compared with 1.6 civil filings per one million people in the United States — was the most active through March 2016. The District of Nevada was ranked first a year ago, while it was ranked fourth five years ago.

  • The District of Rhode Island ranked second and also ranked second a year ago.

  • The Southern District of Illinois now ranks third.

Recent entries to the top 10 list were Vermont, the Northern District of Georgia (Atlanta) and the Western District of Kentucky (Louisville), which are ranked seventh, eighth and sixth, respectively. 

The federal judicial district which showed the greatest growth in the rate of foreclosure civil filings compared to one year ago — up 700 percent — was the Western District of Kentucky. Compared to five years ago, the district with the largest growth — 239 percent — was the Northern District of Florida.

April 28, 2016 in Home and Housing, Mortgage Crisis, Real Estate Finance, Real Estate Transactions, Recording and Title Issues | Permalink | Comments (0)

Sunday, April 24, 2016

Odinet on the Fannie Mae/Freddie Mac Mortgage Contract

Odinet (Headshot SULC background)Chris Odinet (Southern) has posted The Unfinished Business of Dodd-Frank: Reforming the Mortgage Contract (SMU Law Review) on SSRN.  Here's the abstract:

The standard residential mortgage contract is due for a reappraisal. The goals of Dodd-Frank and the CFPB are geared toward creating better stability in the residential mortgage market, in part, by mandating more robust underwriting. This is achieved chiefly through the ability-to-repay rules and the “qualified mortgage” safe harbor, which call for very conservative underwriting criteria to be applied to new mortgage loans. And lenders are whole-heartedly embracing these criteria in their loan originations — in the fourth quarter of 2015 over 98% of all new residential loans were qualified mortgages, thus resulting in a new wave of credit-worthy homeowners that are less likely than ever before to default. As a result of this and other factors, the standard form residential mortgage contract, with its harsh terms and overreaching provisions, should be reformed. This is necessary not only due to the fact that such terms should no longer be needed since borrowers are better financially positioned than in the past, but also because of a disturbing trend in the past few years where lenders and their third party contractors have abused the powers accorded to them by the mortgage contract — mostly through break-in style foreclosures. This Article argues for a reformation of the Fannie Mae/Freddie Mac standard residential mortgage contract and specifically singles out three common provisions that are ripe for modification or outright removal.

April 24, 2016 in Common Interest Communities, Home and Housing, Law & Economics, Mortgage Crisis, Real Estate Finance, Real Estate Transactions, Recent Cases, Recent Scholarship | Permalink | Comments (0)

Sunday, January 31, 2016

Housing in a Time of Expanding Crisis @USFLaw


This past Friday I had the pleasure of participating in a symposium on Housing for Vulnerable Populations and the Middle Class: Revisiting Housing Rights and Policies in a Time of Expanding Crisis, hosted by the wonderful faculty and law review folks at the University of San Francisco School of Law (and a special hat tip to our very gracious host, Tim Iglesias). The timing of this gathering couldn’t have been better. 2015 was a busy year in the housing world as SCOTUS upheld the validity of the disparate impact theory under the Fair Housing Act and HUD issued its significantly updated regulations on the obligation to affirmatively further fair housing. Moreover, cities and local governments are being looked to more than ever to solve major and seemingly intractable issues around housing, spurring a host of new policies, programs, and initiatives. The impressive participants of the USF symposium (coming from practice, government, non-profit, and the academy) explored these and related issues, including potential solutions to pressing problems of housing. Here’s an overview of what the panelists had to say:

What’s the matter with housing?
Rachel Bratt (Harvard Joint Center) kicked off the day by giving an overview of the nation’s current housing woes. She noted that the increase in income inequality over the last 20 years, combined with disinvestment and misinvestment of public resources, has been at the core of the affordable housing issue. She also described how political spending has played a role in further entrenching existing housing interests (in 2015, $234M was spend on real estate/finance lobbying, second only to healthcare). Bratt also explained the uneven distribution of federal housing benefits to the wealthy and the continued persistence of concentrated racial segregation. Rosie Tighe (Cleveland State-Urban Affairs) followed by describing the particular housing problems facing so-called “shrinking cities” (those places in an intense population-decline). She noted that the issue for these cities has more to do with poor quality affordable housing, rather than quantity. Tighe described the failure of low-income housing tax credits to meet the needs of these locales, and discussed the need for more scattered-site developments in these areas, while recognizing the financing and property management challenges inherent in such developments. Peter Dreier (Occidental-Poli Sci) rounded-out the discussion by pointing out that the current political discussions around the presidential election have focused much on wages and other issues, but not at all on housing. He described some reasons for the absence of attention to this important area, and drew the strong connection between household over-all health and housing.

What’s the matter with our current solutions?
Chris Odinet (Southern) started the discussion by describing some current efforts by states and local governments to deal with the fall-out from the housing crisis and on-going issues of blight and abandoned property. He then explained a number of recent federal court cases and acts taken by the FHFA that have significantly frustrated these efforts and also seriously call into question the ability of states and local governments to be innovative in dealing with issues of housing when federal programs are involved. Michael Allen (Relman, Dane, & Colfax) discussed the Fair Housing Act and the new “affirmatively furthering” regulations. He went into depth on contemporary disagreements between affordable housing advocates (who support more affordable units) and fair housing groups (who support integrated housing, and advocated for a way to reconcile their views under the auspices of these new HUD regulations. John Infrana (Suffolk) followed by describing the types of housing in and changing household composition of many cities. Despite these changing demographics, however, housing has not kept pace. In connection with this, Infranca pointed to the many possibilities that micro-housing and accessory-dwelling units (ADU) provide in the way of meeting this need. He noted that ADUs allow for greater economic diversity and can better align with demographic trends, but noted current legal barriers to them such as occupancy requirements and zoning restrictions. Marcia Rosen and Jessica Cassella (both of the National Housing Law Project)) concluded the panel by discussing the current state of the public housing program in the U.S., noting that there are currently 1.2M units (and ever-declining). She described HUD’s recent efforts to give public housing authorities (PHAs) a financing tool to rehab and rebuild these properties through the Rental Assistance Demonstration Program (RAD). This program essentially allows PHAs to convert their public housing stock into section 8 funded housing, and to combine section 8 with tax credits and other forms of debt and equity financing to fund the project. Cassella stated that although the program has great potential in terms of revamping old and decaying public housing properties, there are draw-backs in the way of transparency and long-term funding stability.

What are some new solutions?
For this final panel, John Emmeus Davis (Burlington Community Development Associates) gave an overview of community land trusts (CLTs)—currently over 280 exist nationwide—and their successes across the country. He noted that these types of entities are usually most successful in communities where there would otherwise be no affordable housing available. He noted the ability of CLTs to empower communities, protect tenants, and provide street-level land reform. Andrea Boyack (Washburn) followed by noting the current lack of rental stock compared to the growing demand across the country. She pointed out that in 2015 over half of the population of the U.S. is renting, with an annual demand of 300K new rental units per year. She followed by describing some current statistical trends in American homeownership and posited a number of ways in which cities and states in particular can seek to achieve solutions to these major housing problems. Lastly, Lisa Alexander (Wisconsin) discussed the the human right to housing, not through the lens of federal law, but rather through the ways in which localities across the country are building legal structures that provide many of the rights associated with a right to housing. She noted that market participation has been important to this process, and she used the “tiny homes for the homeless” movement and community control of vacant land as examples.

You can watch each of these presentations by clicking on the youtube video above. Participants, moderators, and USF Dean John Trasviña (former HUD assistant secretary for fair housing) are pictured below.

January 31, 2016 in Conferences, Home and Housing, Land Use, Landlord-Tenant, Law Reform, Mortgage Crisis, Real Estate Finance, Real Estate Transactions, Recording and Title Issues, Takings | Permalink | Comments (0)

Friday, August 23, 2013

Opportunistic Client Hypo

A poster on the DIRT listserv posted a question yesterday that I am going to give my Real Estate Transactions students this semester.  This kind of proposal from a client is not unusual -- I had a longtime real estate developer client and friend propose that I help him with exactly the same scenario.  We talked through a few possibilities, I explained all the legal risk to him, and he either dropped it or found another lawyer more eager to help him.  Anyway, its (a) very real, (b) fraught with legal and ethical issues, and (c) therefore a great problem for real estate students to debate.  Here is the unedited post to DIRT:

Hello all,

I have an opportunistic potential client (PC) with the following situation: 

1)     PC knows a seller (of improved property) who is willing to take $500k for his property.

2)     PC knows a potential buyer who is willing to pay $850k for said property.

3)     PC would like to somehow give the seller and buyer what they want while taking the extra $350k off of the potential buyer’s hands.

Continue reading

August 23, 2013 in Real Estate Finance, Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 13, 2012

Backfilling Vacant Borders Stores

The Wall Street Journal has an interesting piece on the struggle of shopping center owners to backfill former Borders locations, a year after the book seller closed its doors.  In Winston-Salem's Thruway Shopping Center, the Borders space is being retooled for Trader Joe's to open in August.  While I miss having the book store, I welcome not having to drive to Charlotte for my favorite Trader Joe's items.  But as chains which occupy large boxes fail, backfilling those spaces becomes more problematic, particularly at the healthy rents the former tenants paid.  For example, the Circuit City location on Hanes Mall Boulevard remains empty, three years after it closed its doors.

Tanya Marsh

June 13, 2012 in Real Estate Finance, Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 8, 2012

The ABA Section of Real Property, Trust and Estate Law Fellows Program

Troy Rule (Missouri) passes on this info about the ABA Section of Real Property, Trust and Estate Law Fellows Program

The ABA Section of Real Property, Trust and Estate Law Fellows Program encourages the active involvement and participation of young lawyers in Section activities. The goal of the program is to give young lawyers an opportunity to become involved in the substantive work of the RPTE Section, while developing into future leaders.

As a RPTE Fellow, You Will:

• Be assigned to work with a substantive Committee Chair, who will serve as a mentor
and help expose you to all aspects of committee membership

• Get involved in a substantive project, which could include writing for a RPTE publication

• Become a Section liaison to the ABA Young Lawyers Division or your local bar association

• Become an active member of the Membership Committee

• Attend important Section leadership meetings

Click here for more information and to view the 2012 Fellows application

The Fellowship appointment is for two years. To be considered for selection, a person (1) must have practiced in the trusts and estates or real property area for at least one year (and be younger than 36 years of age or have been admitted to the bar less than 10 years), and (2) should have demonstrated leadership at the state or local bar level or in the Young Lawyers Division of the ABA.  As part of the Section's commitment to diversity, three of the six Fellows selected will be minority applicants.

Fellows applications are due June 15, 2012.

According to Troy, you need not have “demonstrated leadership at the state or local bar level or in the Young Lawyer’s Division of the ABA” to get a fellowship.  The fellowship provides $4,000 to cover expenses for four great trips to ABA conferences over a period of two years.  E-mail Troy ( if you have any questions about the fellowships.

Sadly, I aged out of this opportunity a while ago.

Ben Barros

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May 8, 2012 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

Wednesday, January 11, 2012

Case of Week: MERS Has Standing to Foreclose

Via Joseph Singer, here's an interesting decision from the Michigan Supreme Court:

Contrary to the ruling of some other courts, the Michigan Supreme Court held that MERS (Mortgage Electronic Registration Systems) has standing to foreclose on properties for which it is the record holder of the mortgage even if it does not “own’ the note or the right to moneys under the note. The court held that because MERS is the “holder of the mortgage, MERS owned a security lien on the properties, the continued existence of which was contingent upon the satisfaction of the indebtedness.” The court concluded that the legislature would want the record mortgage holder to have the right to foreclose on the property. The case is Residential Funding Co. v. Saurman, 805 N.W.2d 183 (Mich. 2011).

Steve Clowney

January 11, 2012 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

Thursday, December 15, 2011

Nevada Gets Tough on Foreclosures

The LA Times reports that the number of Nevada properties that entered foreclosure fell by 75% in October, even as the rate climbed elsewhere in in the country.

That news, though, did not result from a reversal of fortune in the Nevada housing market. It was spawned by a new Nevada law that plays hardball with companies doing the foreclosing.  Assembly Bill 284, which took effect in October, requires those foreclosing on a home to file an affidavit proving they have the right to bring the action — and it increases civil and criminal penalties for using fraudulent documents in a foreclosure.

Steve Clowney

December 15, 2011 in Home and Housing, Real Estate Finance, Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 30, 2011

Property Themes in the Movie Burlesque

Thanks to Alice Noble-Allgire for passing along this post from a real estate blog on the property themes in the movie Burlesque.  Property saves the day!

Ben Barros

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November 30, 2011 in Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Monday, November 21, 2011

Swire on What the Fair Credit Reporting Act Should Teach Us About Mortgage Servicing

Swire_peterPeter Swire (Ohio State) has posted What the Fair Credit Reporting Act Should Teach Us About Mortgage Servicing on SSRN.  Here' the abstract:

The current housing crisis has revealed deep flaws in the way monthly mortgage payments by homeowners are handled by mortgage servicers – the companies that collect monthly mortgage payments from homeowners and forward the payments to investors in those mortgages. This article suggests that the structural flaws in mortgage servicing are directly analogous to the market failures that led to the creation of the Fair Credit Reporting Act of 1970 (FCRA). The FCRA thus serves as a significant model for possible reforms in mortgage servicing.

Steve Clowney

November 21, 2011 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)