Resolving the Foreclosure Crisis: Modification of Mortgages in Bankruptcy
Adam J. Levitin
This Article empirically tests the economic assumption underlying the policy against bankruptcy modification of home-mortgage debt—that protecting lenders from losses in bankruptcy encourages them to lend more and at lower rates, and thus encourages homeownership. The data show that the assumption is mistaken; permitting
modification would have little or no impact on mortgage credit cost or availability. Because lenders face smaller losses from bankruptcy modification than from foreclosure, the market is unlikely to price against bankruptcy modification. In light of market neutrality, the Article argues that permitting modification of home mortgages in bankruptcy presents the best solution to the foreclosure crisis. Unlike any other proposed response, bankruptcy modification offers immediate relief, solves the market problems created by securitization, addresses both problems of payment-reset shock and negative equity, screens out speculators, spreads burdens between borrowers and lenders, and avoids the costs and moral hazard of a government bailout. As the foreclosure crisis deepens, bankruptcy modification presents the best and least invasive method of stabilizing the housing market.
Creating a Paternalistic Market for Legal Rules Affecting the Benefit Promise
Brendan S. Maher
Notwithstanding the fact that ERISA was enacted to protect employee benefits, courts have narrowly construed the relief available when benefits are denied out of concern that a stronger remedy would be too costly for the system to bear. Judges, I argue, are ill equipped to make this policy judgment. Instead, a regulated, subsidized
, paternalistic market should be created to permit the benefit players themselves to choose and price the strength of the remedy they desire. This is a superior means to reach the right level of remedial strength for the most players. To protect against undesirably weak remedial options being selected, I propose the market should have a highly protective default remedial option, clear disclosure rules, subsidies, and a regulatory floor.
Whose Idea Was It? Why Violations of State Laws Enacted Pursuant to Federal Mandates Should Not Be Negligence Per Se
The federal government often uses its spending power to pressure states into adopting laws that reflect federal standards. Many states have enacted laws, such as laws setting the drinking age at twenty-one, in response to federal pressure and have done so even though the state legislature disagreed with the federal policy. State
courts, however, have paid little attention to the reason states have acted in applying the doctrine of negligence per se and have imposed negligence-per-se liability for violations of standards with which state legislatures clearly disagreed. This Article argues that those courts are wrong. An individual who violates a law that a state adopted in response to a federal mandate should not face negligence-per-se liability because imposing such liability violates the institutional comity rationale for the doctrine and allows the federal government covertly to dictate state tort law. Negligence-per-se liability should only lie when the state legislature has decided that conduct is unsafe. Courts should presume that states have not made such a judgment when they act to comply with a federal mandate.
A Match Made in Heaven or a Pair of Star-Crossed Lovers? Assessing Dormant-Foreign-Commerce-Clause Limitations on the Wisconsin-China Relationship
Jennifer M. Lee
The dormant Commerce Clause has wavered and vexed scholars for two centuries. Now, two developments in Wisconsin—a special economic zone and a bilateral trading relationship with China—are forcing a reexamination of this longstanding constitutional conundrum. The new Wisconsin-China relationship is both a constitutional and
advantageous development. It is a partnership that fosters flexibility in a highly competitive economic era. This growing role of state governments in foreign commerce is notably transforming the global economic landscape and demanding a reconsideration of settled notions of federalism.
Sketchy Eyewitness-Identification Procedures: A Proposal to Draw up Legal Guidelines for the Use of Facial Composites in Criminal Investigations
Jessica M. McNamara
The rising number of exonerations over the last two decades has raised awareness about the fallibility of eyewitness evidence and the flaws within the criminal justice system. Yet, while there has been significant attention paid to improving the reliability of eyewitness-identification procedures such as lineups
, there has been little focus on the use of facial composites, or sketches, in criminal investigations. Recent social-science research raises serious questions about the reliability of composites and their ability to taint an eyewitness’s memory. This Comment suggests several guidelines for the use of facial composites to reduce the risk of misidentifications, thus protecting both individual defendants and the integrity of the criminal justice system as a whole.
The Individuals with Disabilities Education Act (IDEA): Judicial Remedies for Systemic Noncompliance
Erin B. Stein
“Systemic noncompliance” with the Individuals with Disabilities Education Act (IDEA) is increasingly prevalent in school districts throughout the country, leading to the denial of basic educational services to countless special-education students. Systemic noncompliance denotes a widespread failure on the part of the school district
to provide services to numerous special-education students. Additionally, systemic noncompliance necessitates that a school district structurally reform its policies and procedures in order to comply with IDEA’s mandates. Because systemically noncompliant school districts are in need of structural reform in order to comply with IDEA, courts have the responsibility of declaring school districts liable for systemic noncompliance and, furthermore, for devising remedies to bring the district back into compliance with IDEA. However, courts often implement remedies without an understanding of the problems inherent in systemically noncompliant school districts and without a thorough knowledge of effective strategies and programs to implement IDEA. This Comment provides a framework for delineating practical and workable remedies for IDEA systemic noncompliance. This framework will provide those in the legal field with a greater understanding of systemic noncompliance and the judicial remedies that effectively address this problem.