Foreclosure and the Failures of Formality, or Subprime Mortgage Conundrums and How to Fix Them

Joseph William Singer

Harvard Law School

December 1, 2013

Connecticut Law Review, Vol. 46, No. 2, 2013
Harvard Public Law Working Paper No. 14-19

The subprime mortgage crisis was not only an economic disaster but posed challenges to traditional rules of property law. Banks helped create the crisis by marketing mortgages through unfair and deceptive practices. They induced many consumers to take out high-priced loans they could not afford and then passed the risk to investors who were fooled into thinking these were safe investments. These practices violate traditional norms underlying both consumer protection and securities regulation statutes. In addition, U.S. banks greased the wheels of the mortgage securitization process by creating a privatized mortgage registration system that has undermined the clarity and publicity of property titles. Because of securitization procedures and the lax record-keeping practices, the banks have undermined the property recording system; we no longer have clear public titles to real property in the United States. To fix the mess they left us, we must adopt norms to govern the mortgage market that will protect both homeowners and investors from predatory loans while promoting legitimate property transactions. We also need to fix the mortgage registration system so we have a legal infrastructure for property that both works well and reflects the norms of a free and democratic society.

Number of Pages in PDF File: 65

Keywords: real property, foreclosure, mortgages, subprime, consumer protection

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Date posted: February 4, 2014 ; Last revised: June 20, 2014

Suggested Citation

Singer, Joseph William, Foreclosure and the Failures of Formality, or Subprime Mortgage Conundrums and How to Fix Them (December 1, 2013). Connecticut Law Review, Vol. 46, No. 2, 2013; Harvard Public Law Working Paper No. 14-19. Available at SSRN: http://ssrn.com/abstract=2390097

Contact Information

Joseph W. Singer (Contact Author)
Harvard Law School ( email )
1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
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