1,005 research outputs found

    Legal and Policy Choices in the Aftermath of the Subprime and Mortgage Financing Crisis

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    This essay, delivered at a symposium at the University of South Carolina in October 2008 and forthcoming in South Carolina Law Review, sets out initial thoughts about to the legal and policy choices that decision makers must address in the aftermath of the subprime crisis that has since triggered a global financing crunch. After tracing a narrative of how subprime lending grew into a mortgage financing crisis and then a broader financial dislocation, the essay addresses two issues. First, while it is commonly stated that increased regulation will be required in secondary mortgage markets going forward, the essay explores competing policy considerations that legislators and regulators must balance in developing effective regulation and not overregulation. These policy issues include: the benefits of the secondary mortgage; the globalization of capital; prevention of fraud and predatory lending; personal responsibility vs. paternalism; market discipline vs. regulation; ending racial discrimination in lending; the role of intermediation in creating the crisis; the current state of the American dream of home ownership; and addressing risk shifting vehicles. The second part of the essay examines how the development of the secondary market has changed mortgage law in the various states. It discusses the benefits, and costs, of the nationalization of real estate documents and terms brought by Fannie Mae and Freddie Mac and speculates on how conservatorship of these institutions may affect this trend. The essay also looks at modernization of state mortgage law in light of the secondary market, through vehicles such as MERS, and the lessons that the crisis teaches about the modernization trend. It argues that the beneficial aspects of modernization should be retained and suggests other changes that would better reflect commercial reality (e.g., changes in assignment rules for mortgages, documentation for foreclosure), but asserts that increased consumer protection and transparency are also necessary for fair and effective secondary market transactions

    Solving the Contentious Issues of Private Conservation Easements: Promoting Flexibility for the Future and Engaging the Public Land Use Process

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    Over the past thirty years, statutes have reversed the common law and authorized private conservation organizations to hold conservation easements in gross. These interests allow nonprofits to control the use and development of the burdened property by preventing alterations of the natural and ecological features. Conservation easements can be held by organizations geographically distant from the restricted land. Conservation easements bring great benefits as they support conservation, represent private initiative, yield efficiency benefits, and exemplify freedom of choice of property owners. There are costs, however: significant federal and state tax subsidies, the lack of coordinated planning and public process, class issues, stewardship failures by nonprofits, and lack of flexibility by easement holders to meet emerging needs of the community (such as for economic development or affordable housing). There is a risk to effective policy making and democratic principles when local, public land use decisions are delegated to non-representative, non-accountable private organizations. The benefits of private conservation easements are significant, and they should be continued but with changes. The paper suggests five principles and related specific reforms that should be enacted: restoring market mechanisms in the creation of conservation easements; enhancing governance and operations of easement holders; protecting the expectations of future generation owners; achieving flexibility through expanded termination and modification doctrines; and preserving the public\u27s power of eminent domain

    In Memoriam: James Pierce Kibbey

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    Resolving the Intergenerational Conflicts of Real Property Law: Preserving Free Markets and Personal Autonomy for Future Generations

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    This article argues that land allocation agreements (e.g., deeds, mortgages, covenants, easements, etc.) made today will have a profound and perhaps negative effect on owners in future generations. It shows that the current architecture of the land transaction system and related rules unduly favor current owners over successors, causing a negative impact on land markets and choices of future players. Moreover, the article demonstrates that current doctrine and theory do not provide adequate flexibility for future generations to deal with outmoded land allocation agreements, leading to inefficiencies and frustration of the personal autonomy of future owners. The article suggests a new conceptual framework as well as specific alternative approaches for courts and legislatures across the spectrum of real property areas (including, inter alia, interpretation of instruments, the recording system, changed circumstances rules, conservation easements, subdivision covenants, and eminent domain). Given the historical and ongoing importance of land in the American experience, it is essential that decision makers act to guarantee future generations the opportunity to engage in markets and to fulfill their personal aspirations
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