Neighbors of Foreclosed Property Protest Condition

There's a story at the Consumerist blog today relating the protest of San Jose homeowners.  The protesters were angry at the upkeep (or lack thereof) of a foreclosed property in their neighborhood.  They dropped bags of trash from the home in the lobby of a local Wells Fargo branch.  Unfortunately, it turns out the house was owned by Bank of America.  Police were called but no arrests were made.

Consumerist labels this story "Misdirected Anger," and that's certainly what this is.  Even if the property had been owned by Wells Fargo, the local tellers would have had no connection to the mortgage department and the upkeep of the property is surely contracted out to yet another party.

If you find yourself in a similar situation, the proper course of action is to contact the city or county government and alert them to the presence of a nuisance.  The municipal government can investigate, take steps to alleviate the condition, and then bill the (actual) owner of the property.  This process will be slower, and may be less emotionally satisfying, but you can avoid having the police called on you. 

Image: Ian Kahn / FreeDigitalPhotos.net

Decline In Foreclosures

Les Christie at CNNMoney reports that foreclosures are down this year, but explains that may not be the economic good news that it seems:

"These dramatic decreases indicate the foreclosure pipeline continues to be clogged in many local markets across the country," said RealtyTrac CEO, James Saccacio, whose firm reported earlier this month that the national foreclosure rate fell 29% over the past 12 months.

Much of that backlog, he explained, is due to a glut of already-foreclosed properties that the banks are having a hard time selling and to the slowdown in the processing of foreclosures following the "robo-signing scandal" of 2010.

As a result of the scandal, in which the banks were accused of mishandling paperwork and failing to follow proper protocols, banks are being much more careful and many filings have been delayed.

The Morality of Adverse Possession

Over at Concurring Opinions, David Fagundes has an interesting post contemplating the morality of adverse possession.

Adverse possession may be the most counterintuitive doctrine introduced to students during their first year of law school, or even at any time during law school.  The notion that a trespasser can become a valid title holder, eliminating the prior owner’s claim to the property, seems terribly wrong to students at first blush.

And that’s exactly why I enjoy teaching it so much.  Because when examined more closely, there are plausible utilitarian rationales underlying adverse possession.  Adverse possession may reward and incentivize more productive use of land, increasing aggregate social welfare.  Pressed to examine this and other rationales, students may not end up agreeing that adverse possession is a good doctrine, but they learn that the story is a lot more complicated than their initial reaction indicated.

It reminded my of my own property professor, Jim Krier (father of Andrew WK), who delighted in challenging the class on our notions of "fairness" as they related to property law.

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National Association of Realtors Argues Against Stricter Requirements For Homebuyers

Ilyce Glink reports on recommendations by the National Association of Realtors.  Among them:

2. Regulators should reduce the overcorrection in underwriting standards for mortgages from the Federal Housing Administration (FHA) and government-sponsored enterprises (also known as the GSEs)because the now-too-stringent standards are preventing qualified borrowers from getting loans.

Phipps said more regulations and legislation that tighten access to credit and affordable safe mortgages are not the solution to righting the housing market and economy.

New Home Sales Report For June

New home sales report for June is released.  Numbers are down from May, but up compared to this time last year.  See the full report via Bloomberg.

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