The Municipal Cost of Foreclosure: A Chicago Case Study

The recent rise in nonprime mortgage foreclosures has opened a new and costly chapter in many of the nation's most distressed urban neighborhoods. Particularly problematic is the fact that today's foreclosures impose significant costs not only on borrowers and lenders, but also on municipal governments, neighboring homeowners and others with a financial interest in nearby properties. While there is an extensive literature on the impact that delinquency, default, and foreclosure have on lenders, borrowers, and other entities that are direct parties to the mortgage transaction in question, the costs that these mortgage failures impose on municipalities and other third parties are far less well understood. This is due to two factors. First, municipal and other third party costs are difficult to identify, and therefore often go undetected. Second, even where identified, the activities that generate costs often blend in with other governmental functions, or are otherwise difficult to quantify, reinforcing the tendency for them to remain invisible.This study attempts to fill that void. Using the City of Chicago as a case in point, this study presents a conceptual framework that makes explicit the various costs of foreclosure, especially as they relate to local governments and courts. By carefully reviewing the foreclosure process as it plays out in Chicago, the paper isolates 26 separate costs incurred for the provision of 'foreclosure related services.' These costs reflect actions undertaken by 15 separate governmental units that are part of the overall municipal infrastructure underlying the foreclosure process. While in some cases these municipal activities are limited to simple and relatively inexpensive ministerial duties of agencies like the Recorder of Deeds, in more complex foreclosure scenarios these municipal costs can reach tens of thousands of dollars. In extreme cases, the concentrated foreclosures can put downward pressure on area property values and indirectly rob area homeowners of hundreds of thousands of dollars of home equity

11-20-1982 Preliminary Memorandum

SUMMARY: A voluntary deferred compensation plan allowed retiring employees to choose between three forms of payments, including an annuity bought by petrs from independent insurance companies who use sex-based actuarial tables. The question is whether the employer has violated Title VII by offering this optio

Welfare-maximizing monetary policy under parameter uncertainty

This paper examines welfare-maximizing monetary policy in an estimated micro-founded general equilibrium model of the U.S. economy where the policymaker faces uncertainty about model parameters. Uncertainty about parameters describing preferences and technology implies not only uncertainty about the dynamics of the economy. It also implies uncertainty about the model's utility-based welfare criterion and about the economy's natural rate measures of interest and output. We analyze the characteristics and performance of alternative monetary policy rules given the estimated uncertainty regarding parameter estimates. We find that the natural rates of interest and output are imprecisely estimated. We then show that, relative to the case of known parameters, optimal policy under parameter uncertainty responds less to natural-rate terms and more to other variables, such as price and wage inflation and measures of tightness or slack that do not depend on natural rates.Monetary policy

Abolishing Exclusive Jurisdiction in the Federal Circuit: A Response to Judge Wood

Part of a symposium of responses to Chief Judge Wood’s suggestion for giving regional circuits a share of the Federal Circuit’s authority over patent law, this article argues that now that a degree of nationwide uniformity in patent law has been achieved, it would be a pity to disrupt it. While Chief Judge Wood is right that the law would improve with percolation, a change in the composition of the court, new procedures for challenging patents in the Patent and Trademark Office, a District Court pilot program, and satellite patent offices will bring to the debate new voices, different kinds of expertise, and diverse experience. It is worth waiting to see how these changes play out

Games Economists Play

When Professor Reichman called me about this symposium, I was intrigued. With the successive introduction of the photocopy machine, the videotape, computerization, digitization, the Internet, as well as a host of biotechnological discoveries, the problems facing the creative industries have changed dramatically. This accumulation of developments has altered the economic foundations on which intellectual property law is based and has pushed those of us in the field into a period of reconceptualization in which economic analysis is particularly fruitful. Thus, I was quite taken with the idea of bringing intellectual property and economics scholars together to promulgate a research agenda and I was, of course, delighted to be asked to contribute my thoughts. Before I set these out, I would like to begin with a question that may seem far afield, but which will, I believe, shed light on the agenda I propose. The question is this: why are there no continental lawyers here? Given Professor Reichman\u27s prominence in international-particularly European-circles, it should seem quite puzzling. Or rather, it would be quite puzzling to me, but for my experience at the Max Planck Institute for Foreign and International Patent, Copyright and Competition Law in Munich, Germany. The Institute does wonderful, insightful work, including excellent empirical studies. But while there, I was struck by the paucity of interest in economic theory among its scholars. As one of my colleagues there explained, continental legal theorists certainly ex- amine economic facts, but they are not of the view that economic theory has a large role to play in lawmaking. This thinking is, of course, very much at odds with the core premises of those assembled here, and I would like to take a moment to explore its basis. One reason for the difference in views on economic analysis may be specific to intellectual property. The argument here would be that although Europeans can be as theory-oriented as Americans, continental thinking about intellectual property has traditionally focused on moral arguments-claims about the personality of the author and his intimate connection to his work.\u27 In contrast, intellectual property regimes in the United States are constitution- ally defined as resting on instrumental-economic-precepts. As a result, economic analysis arguably has more to contribute here than it does abroad. But this cannot be the whole answer. It does not, for example, explain apparent continental indifference to the use of economic theory with respect to other legal issues, such as tort questions. Moreover, the rationales underlying intellectual property regimes are coalescing: as Professor Thomas Dreier has pointed out, there is more economics in continental rationales for protection than is usually acknowledged, and the TRIPS Agreement has brought these systems into even closer alignment. Thus, a mode of analysis that is utilized in the U.S. should now be relevant to Europe, even if it lacks intuitive appeal there

Percolation, Uniformity, and Coherent Adjudication: The Federal Circuit Experience

Two important lessons had been taught by the reactions to the Freund and Hruska Reports. One was that it was politically unacceptable to shut off any case in the lower federal courts from access to the Supreme Court by way of certiorari, however unavailing that might be in reality. . . . In addition, a widespread sentiment was evident among the bench and bar against having specialized courts. \u2

Abolishing Exclusive Jurisdiction in the Federal Circuit: A Response to Judge Wood

Part of a symposium of responses to Chief Judge Wood’s suggestion for giving regional circuits a share of the Federal Circuit’s authority over patent law, this article argues that now that a degree of nationwide uniformity in patent law has been achieved, it would be a pity to disrupt it. While Chief Judge Wood is right that the law would improve with percolation, a change in the composition of the court, new procedures for challenging patents in the Patent and Trademark Office, a District Court pilot program, and satellite patent offices will bring to the debate new voices, different kinds of expertise, and diverse experience. It is worth waiting to see how these changes play out

Stagnation-point heat-transfer rate predictions at aeroassist flight conditions

The results are presented for the stagnation-point heat-transfer rates used in the design process of the Aeroassist Flight Experiment (AFE) vehicle over its entire aeropass trajectory. The prediction methods used in this investigation demonstrate the application of computational fluid dynamics (CFD) techniques to a wide range of flight conditions and their usefulness in a design process. The heating rates were computed by a viscous-shock-layer (VSL) code at the lower altitudes and by a Navier-Stokes (N-S) code for the higher altitude cases. For both methods, finite-rate chemically reacting gas was considered, and a temperature-dependent wall-catalysis model was used. The wall temperature for each case was assumed to be radiative equilibrium temperature, based on total heating. The radiative heating was estimated by using a correlation equation. Wall slip was included in the N-S calculation method, and this method implicitly accounts for shock slip. The N-S/VSL combination of projection methods was established by comparison with the published benchmark flow-field code LAURA results at lower altitudes, and the direct simulation Monte Carlo results at higher altitude cases. To obtain the design heating rate over the entire forward face of the vehicle, a boundary-layer method (BLIMP code) that employs reacting chemistry and surface catalysis was used. The ratio of the VSL or N-S method prediction to that obtained from the boundary-layer method code at the stagnation point is used to define an adjustment factor, which accounts for the errors involved in using the boundary-layer method