The Rand Corporation has posted Flood Insurance in New York City Following Hurricane Sandy. The report has a chapter on affordability issues that is worth a read, particularly as the de Blasio Administration undertakes its ambitious affordable housing plan. The report notes that

many New Yorkers will face substantially higher flood insurance premiums moving forward. Many more structures will be in areas considered high-risk than in the past, and premiums for many structures already in high-risk areas will be based on considerably higher flood levels.

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These substantial premium increases will reduce the disposable income or wealth (or both) of many households and may well be unaffordable for some. In the absence of intervention, the consequences may be foreclosures, turnover, and hardship for some of New York City’s more-vulnerable citizens.(63)

The book goes on to review a variety of approaches “for addressing the affordability issue.” (67) It reviews “tax credits, grants, and vouchers that could be applied toward the cost of flood insurance.” (63) It also notes that such interventions distort “the price signal that incentives property owners to invest in risk-mitigation measures in order to reduce premiums.” (67) It considers proposals to deal with such distortion, such as a means-tested voucher program that is coupled “with a requirement that mitigation measures be taken that make sense for the property.” (67) The book only scratches the surface of this topic, noting that more “information is needed to address the advantages and disadvantages of alternative strategies for addressing affordability.” (68)

As the de Blasio Administration considers the preservation portion of its affordable housing agenda, one could imagine that a concerted effort to incentivize risk mitigation while also promoting affordability could be a significant component of the final plan. Solutions could range from deferred payment, due on sale or refinance of a home, to outright subsidies as outlined by the Rand report. Whatever the ultimate solution is, the problem should be incorporated into the City’s planning now.


The court in deciding Mortgage Elec. Registration Sys. v. Ditto, 2014 Tenn. App. (Tenn. Ct. App., 2014) affirmed the judgment of the lower court.

This appeal involved the purchase of property at a tax sale. MERS filed suit against purchaser to invalidate his purchase of property because it had not received notice of the sale even though it was listed as a beneficiary or nominee on the deed of trust.

Purchaser claimed that MERS was not entitled to notice because MERS did not have an interest in the property. Purchaser also alleged that MERS failed to properly commence its lawsuit because it did not remit the proper funds pursuant to Tennessee Code Annotated section 67-5-2504(c).

The trial court refused to set aside the tax sale, holding that the applicable notice requirements were met and that the purchaser was the holder of legal title to the property. MERS appealed the lower court’s decision, however this court affirmed the decision of the lower court.

Since appellant was never given an independent interest in the property, and it did not suffer an injury by the sale of the property at issue, and the only injury suffered by appellant related to the future effect the case could have on its business model, which was not a distinct and palpable injury capable of being redressed by the court, the trial court’s grant of the purchaser’s motion for judgment on the pleadings was properly granted as appellant did not have standing to file suit to set aside the tax sale of the property for lack of notice under Tenn. Code Ann. § 67-5-2502(c) and the Due Process Clause of the Fourteenth Amendment.

The court found that the failure to tender the appropriate funds when filing the petition to set aside the sale under Tenn. Code Ann. § 67-5-2504(c) was not a prerequisite for relief.


The court in deciding Champion v. Bank of Am., N.A., 2014 U.S. Dist. 78 (E.D.N.C., 2014) dismissed the plaintiff’s FDCPA and RESPA claims.

Plaintiff initiated this action asserting claims for violations of the Fair Debt Collection Practices Act (“FDCPA”), the Real Estate Settlement Procedures Act (“RESPA”), and North Carolina statutory and common law. In response, the moving defendants filed the instant motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).

The court first considered plaintiff’s federal claims. The movants’ primary arguments for dismissal of this claim was that plaintiff had failed to sufficiently allege that BANA was a debt collector under the FDCPA. The court agreed with this argument.

Plaintiff’s other federal claim was asserted under RESPA. Plaintiff alleged that defendants collectively violated that act ” through numerous assignments and transfers of the note and deed of trust without having given the proper notice to plaintiff within the proper time frame,” and “by failing to inform Plaintiff of any transfers of the loan servicing of her loan.”

However, the court agreed with the movants that plaintiff had failed to allege any damages flowing from the purported failure to be notified of the change in the entity servicing her mortgage. Accordingly the court dismissed the plaintiff’s remaining claims.


Researchers at the World Bank have posted Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature.The abstract reads,

This paper presents a systematic and comprehensive meta-analysis of the literature on financial education interventions.  The analysis focuses on financial education studies designed to strengthen the financial knowledge and behaviors of consumers. The analysis identifies188 papers and articles that present impact results of interventions designed to increase consumers’ financial knowledge (financial literacy) or skills, attitudes, and behaviors (financial capability). These papers are diverse across a number of dimensions, including objectives of the  program intervention, expected outcomes, intensity and duration of the intervention, delivery channel used, and type of population targeted. However, there are a few key outcome indicators where a subset of papers are comparable, including those that address savings behavior, defaults on loans, and financial skills, such as record keeping. The results from the meta analysis indicate that financial literacy and capability interventions can have a positive impact in some areas (increasing savings and promoting financial skills such a record keeping) but not in others (credit default).

I hope that policy makers at the CFPB have reviewed this paper carefully. The Bureau has a financial education mission that must be built on solid research if it hopes to improve outcomes for consumers. A lot of the scholarly work in this area has questioned the efficacy of financial education, but the Bureau seems to be going full speed ahead with it. The Bureau should bore down into the literature to determine which types of interventions are effective before allocating funds indiscriminately to new initiatives.

I am particularly concerned about the last sentence of the abstract which indicates that interventions have failed to improve consumer behavior when it comes to credit default. That seems to be a big problem for any financial skills initiative. Further research should focus on alternative interventions that might be effective in reducing credit default by consumers. And funds should not be wasted in the interim on unproven initiatives in this area.


The court in deciding Gonzalez v. Bank of Am., N.A., 2014 U.S. Dist, 67 (N.D. Ill. 2014) granted defendant’s motion to dismiss.

Plaintiff (Gonzalez) filed a four-count complaint against Bank of America and MERS seeking damages arising from alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. (Count I); void assignment of mortgage in violation of the Fourteenth Amendment (Count II); lack of authority to assign mortgage (Count III); and, against Bank of America only, violation of the Illinois Mortgage Foreclosure Law (Count IV).

Defendants moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Ultimately the court granted defendant’s motion.


The court in deciding Bolden v. McCabe, Weisberg & Conway, LLC, 2013 U.S. Dist., 182057 (D. Md. 2013) granted defendant’s motion to dismiss and denied plaintiff’s motion for summary judgment.

Plaintiff in bringing this action alleged violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law, § 14-201 et seq., and the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law § 13-101 et seq.

After considering the plaintiff’s arguments, the court found that the sparse factual allegations in the complaint could not sustain the claims, as such the court granted defendant’s motion to dismiss and plaintiff’s motion for summary judgment was denied.


The court in deciding Mutua v. Deutsche Bank Nat’l Trust Co., 2013 Minn. Dist. 65 (Minn. Dist. Ct. 2013) found that since the defendant had a valid legal title to plaintiffs’ mortgage. Plaintiffs had failed to state a claim against either defendant and their respective motions to dismiss are granted.

This Court reasoned that there was a valid assignment of plaintiffs’ mortgages to defendant which gave defendant legal title to the mortgages and allowed Defendant to foreclose on plaintiffs’ properties.

The court noted that both the Minnesota Supreme Court and the United States Court of Appeals for the Eighth Circuit had rejected the legal theory, which has become known as “show-me-the-note,” advanced by plaintiffs.

In the present action, the court noted that plaintiffs merely tweaked this legal theory and argued that based on the language of the plaintiffs’ mortgage and note, an entity different from defendant Deutsche Bank National Trust Company had the legal right to foreclose on plaintiffs’ homes. This argument was rejected.