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View Diary: Don't Throw Sergeant VerSteegh from His House (27 comments)

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  •  it's been kind to the executive branch (0+ / 0-)

    not the legislative branch.

    TPM has a good break down of this:

    Since the founding of this country, foreclosure laws have been the special province of the state. In the same way that they set up the basic rules of property law and property transfer, states decide the terms on which people could be thrown out of their homes or off their farms by the mortgage lender. There are no federal foreclosure laws. Any mortgage holder--including a national bank or thrift--must abide by the terms of the state's foreclosure laws.

    Why do you want a federal law to pre-empt state laws?  Banks and mortgage companies need to meet the requirements of State law in terms of foreclosure.  

    But since you did bring it up, where does Congress have the authority in this matter? They don't license lenders (except through the OCC, OTS and the Fed banks), states do. Hasn't the precedent already been set at this point? ANd proceeding down this road only muddies the waters as this commenter noted on TPM
    :

    This is a states issue, not a federal concern. In fact, a federal response could muddy juridictional waters. The banks will make the case that compliance with local law represents an onerous burden when foreclosing on a bad loan. They'll argue that it requires engaging local law firms and creates complexity in managing foreclosure proceedings. They'll make the case that application of local law was fine when mortgages were local transactions, but now that mortgages are bundled and sold in global markets the local laws are antiquated and ineffective. A federal response could support the argument that there is a legitimate jurisdictional issue.

    I highly recommend a read of the comments.  Allowing banks to meet a federal guideline means they don't have to meet the State laws, often in place since before the ratification of the Constitution. In states like New Mexico, Arizona and California, it's even muddier because of their Spanish legal history and how that effects real property laws in those states.

    •  some people don't want the federal govt to act (0+ / 0-)

      which is their democratic right. but that's not an argument that the federal government can't act.

      •  Checks and balances (0+ / 0-)

        The Fed can always act, but it will not pass the scrutiny of the courts and it shouldn't.  The Federal Government should not legislate an issue like real estate anymore than telling each state how to fund their schools.  It's none of the Fed's business how schools are funded or how foreclosures are managed.

        the fed should have stepped in when Fannie and Freddie asked for the authority to rgulate subprime, but we had a Republican administration and Congress, so Freddie and Fannie were both told "scope/mission creep" and forced not to regulate this issue.  And now, we're in the mess we're in.  Most of the issues now being dealt with aren't legislative, they are regulatory and you already know that Bush didn't want to regulate the industry.  Giving the executive branch more ability to regulate this issue by Congress acting isn't going to actually do a damn thing.  It certainly isn't going to help any of the states deal with the rise in foreclosures caused in part by "liar" loans, poor credit risks or the lack of income for many of their state residents.

        But, hey, keep telling yourself there's an easy answer and that Congress can just legislate a solution. It's not true, but maybe it makes you sleep better at night.

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