Monday, November 19, 2007

A federal mortage law? Congressional Rsearch Service Study

Thanks to Inter Alia for the lead to this article: Understanding Mortgage Foreclosure:
Recent Events, the Process, and Costs
(PDF format)

The article contains a question I have never heard of before - would a federal foreclosure law be a good thing?

Finally, even if a federal foreclosure law were structured to represent a compromise, the impact on costs would be ambiguous. A process designed to take longer than a few months, but completed in less than two years, may result in costs increasing for lenders in states where the process moves rather quickly and declining for lenders in states where the process moves slowly. The net effect on a national cost estimate, therefore, is indeterminate. Under a federal foreclosure law, however, it may become easier to obtain a much more reliable national estimate of the actual foreclosure costs, since lenders would follow similar foreclosure procedures nationwide.
I say that paragraph contains all the ambiguities and contradictions of our federal system. I do not think that a federal foreclosure law would be of any great benefit - not compared with removing the onerous provisions of the bankruptcy "reforms".