Confronting the Mortgage Meltdown: A Brief for the Federalization of State Mortgage Foreclosure Law

This Article argues for federal preemption of state procedures governing the foreclosure of mortgages and security interests in rents. While it also suggests that federal action limiting or prohibiting state anti-deficiency legislation may be appropriate, it leaves this issue to future consideration. Thus, its major focus is to advocate the congressional adoption of both Uniform Nonjudicial Foreclosure Act (UNFA) and Uniform Assignment of Rents Act (UARA) to make them available to all lenders nationwide. However, the federal government has a special stake in greater uniformity for its own account. This is especially the case as to mortgages on real estate. The fallout of the economic crisis of the past year and a half has made it the owner or guarantor of millions of mortgages. It will be confronted with an overwhelming number of foreclosures that will survive all attempts at modification. Given the fact that Fannie Mae and Freddie Mac are now wards of the federal government, the federal stake in efficient and fair foreclosure procedures has become compelling. Forcing the federal government to foreclose possibly hundreds of thousands of mortgages judicially in many states seems almost surreal. Given the enormous cost of this crisis to the federal taxpayers, the government should not be held hostage to arcane and outmoded foreclosure procedures. Even in nonjudicial foreclosure states, the federalization of Fannie Mae and Freddie Mac probably necessitates changes in some statutes to comply with constitutional due process mandates. At the very minimum, the federal Single Family and Multifamily Acts with minor modifications should be made available to all federal agencies

Foreclosure Purchase by the Equity of Redemption Holder or Other Junior Interests: When Should Principles of Fairness and Morality Trump Normal Priority Rules, The

The foregoing leads to the major question posed by this paper - when should the logic of mortgage foreclosure law and its priority rules be trumped by an overriding concern for fairness and morality? This question is uniquely suited to a symposium dedicated to Dale Whitman\u27s career as a teacher and scholar. This paper examines this question in two distinct contexts. In Part II of this paper, the focus is on whether the mortgagor or other holder of the equity of redemption 7 who purchases the property at the foreclosure sale of a senior lien acquires a title free and clear of junior interests. Part III examines whether the holder of a junior interest who purchases at a foreclosure sale of a senior lien acquires a title free and clear of the mortgagor\u27s equity of redemption and other interests that were junior to the foreclosed lien. Part IV offers a brief conclusion