May 30, 2016
Song of Roland
A statue of Roland at Metz railway station, France
In commemoration of Memorial Day, a selection from The Song of Roland, an epic poem from the days of Charlemagne:
The Horn
CXLVIII
As Roland gazed on his slaughtered men, He bespake his gentle compeer agen: “Ah, dear companion, may God thee shield! Behold, our bravest lie dead on field! Well may we weep for France the fair, Of her noble barons despoiled and bare. Had he been with us, our king and friend! Speak, my brother, thy counsel lend, How unto Karl shall we tidings send?” Olivier answered, “I wist not how. Liefer death than be recreant now.”
CXLIX
“I will sound,” said Roland, “upon my horn, Karl, as he passeth the gorge, to warn. The Franks, I know, will return apace.” Said Olivier, “Nay, it were foul disgrace On your noble kindred to wreak such wrong; They would bear the stain their lifetime long. Erewhile I sought it, and sued in vain; But to sound thy horn thou wouldst not deign. Not now shall mine assent be won, Nor shall I say it is knightly done. Lo! both your arms are streaming red.” “In sooth,” said Roland, “good strokes I sped.”
CL
Said Roland, “Our battle goes hard, I fear; I will sound my horn that Karl may hear.” “‘Twere a deed unknightly,” said Olivier; “Thou didst disdain when I sought and prayed: Saved had we been with our Karl to aid; Unto him and his host no blame shall be: By this my beard, might I hope to see My gentle sister Alda’s face, Thou shouldst never hold her in thine embrace.”
CLI
“Ah, why on me doth thine anger fall?” “Roland, ’tis thou who hast wrought it all. Valor and madness are scarce allied, Better discretion than daring pride. All of thy folly our Franks lie slain, Nor shall render service to Karl again, As I implored thee, if thou hadst done, The king had come and the field were won; Marsil captive, or slain, I trow. Thy daring, Roland, hath wrought our woe. No service more unto Karl we pay, That first of men till the judgment day; Thou shalt die, and France dishonored be Ended our loyal company A woful parting this eve shall see.”
CLII
Archbishop Turpin their strife hath heard, His steed with the spurs of gold he spurred, And thus rebuked them, riding near: “Sir Roland, and thou, Sir Olivier, Contend not, in God’s great name, I crave. Not now availeth the horn to save; And yet behoves you to wind its call, Karl will come to avenge our fall, Nor hence the foemen in joyance wend. The Franks will all from their steeds descend; When they find us slain and martyred here, They will raise our bodies on mule and bier, And, while in pity aloud they weep, Lay us in hollowed earth to sleep; Nor wolf nor boar on our limbs shall feed.” Said Roland, “Yea, ’tis a goodly rede.”
CLIII
Then to his lips the horn he drew, And full and lustily he blew. The mountain peaks soared high around; Thirty leagues was borne the sound. Karl hath heard it, and all his band. “Our men have battle,” he said, “on hand.” Ganelon rose in front and cried, “If another spake, I would say he lied.”
CLIV
With deadly travail, in stress and pain, Count Roland sounded the mighty strain. Forth from his mouth the bright blood sprang, And his temples burst for the very pang. On and onward was borne the blast, Till Karl hath heard as the gorge he passed, And Naimes and all his men of war. “It is Roland’s horn,” said the Emperor, “And, save in battle, he had not blown.” “Battle,” said Ganelon, “is there none. Old are you grown – all white and hoar; Such words bespeak you a child once more. Have you, then, forgotten Roland’s pride, Which I marvel God should so long abide, How he captured Noples without your hest? Forth from the city the heathen pressed, To your vassal Roland they battle gave, He slew them all with the trenchant glaive, Then turned the waters upon the plain, That trace of blood might none remain. He would sound all day for a single hare: ‘Tis a jest with him and his fellows there; For who would battle against him dare? Ride onward – wherefore this chill delay? Your mighty land is yet far away.”
CLV
On Roland’s mouth is the bloody stain, Burst asunder his temple’s vein; His horn he soundeth in anguish drear; King Karl and the Franks around him hear. Said Karl, “That horn is long of breath.” Said Naimes, “‘Tis Roland who travaileth. There is battle yonder by mine avow. He who betrayed him deceives you now. Arm, sire; ring forth your rallying cry, And stand your noble household by; For your hear your Roland in jeopardy.”
CLVI
The king commands to sound the alarm. To the trumpet the Franks alight and arm; With casque and corselet and gilded brand, Buckler and stalwart lance in hand, Pennons of crimson and white and blue, The barons leap on their steeds anew, And onward spur the passes through; Nor is there one but to other saith, “Could we reach but Roland before his death, Blows would we strike for him grim and great.” Ah! what availeth! – ’tis all too late.
CLVII
The evening passed into brightening dawn. Against the sun their harness shone; From helm and hauberk glanced the rays, And their painted bucklers seemed all ablaze. The Emperor rode in wrath apart. The Franks were moody and sad of heart; Was none but dropped the bitter tear, For they thought of Roland with deadly fear. Then bade the Emperor take and bind Count Gan, and had him in scorn consigned To Besgun, chief of his kitchen train. “Hold me this felon,” he said, “in chain.” Then full a hundred round him pressed, Of the kitchen varlets the worst and best; His beard upon lip and chin they tore, Cuffs of the fist each dealt him four,
Roundly they beat him with rods and staves; Then around his neck those kitchen knaves Flung a fetterlock fast and strong, As ye lead a bear in a chain along; On a beast of burthen the count they cast, Till they yield him back to Karl at last.
CLVIII
Dark, vast, and high the summits soar, The waters down through the valleys pour, The trumpets sound in front and rear, And to Roland’s horn make answer clear. The Emperor rideth in wrathful mood, The Franks in grievous solicitude; Nor one among them can stint to weep, Beseeching God that He Roland keep, Till they stand beside him upon the field, To the death together their arms to wield. Ah, timeless succor, and all in vain! Too long they tarried, too late they strain.
May 30, 2016 | Permalink | No Comments
May 27, 2016
Mommy, I’m Home!
The Pew Research Center has released For First Time in Modern Era, Living with Parents Edges out Other Living Arrangements for 18- to 34-Year-Olds (link for complete report on right side of page). This report adds to the growing literature on changes in household formation (see here, for instance) that have taken hold in large part since the financial crisis. There are lots of reasons to think that the way we live now is different from how we lived one generation, two generations, three generations ago.
The report opens,
Broad demographic shifts in marital status, educational attainment and employment have transformed the way young adults in the U.S. are living, and a new Pew Research Center analysis of census data highlights the implications of these changes for the most basic element of their lives – where they call home. In 2014, for the first time in more than 130 years, adults ages 18 to 34 were slightly more likely to be living in their parents’ home than they were to be living with a spouse or partner in their own household.
This turn of events is fueled primarily by the dramatic drop in the share of young Americans who are choosing to settle down romantically before age 35. Dating back to 1880, the most common living arrangement among young adults has been living with a romantic partner, whether a spouse or a significant other. This type of arrangement peaked around 1960, when 62% of the nation’s 18- to 34-year-olds were living with a spouse or partner in their own household, and only one-in-five were living with their parents. (4, footnotes omitted)
The report found that education, race and ethnicity was linked to young adult living arrangements. Less educated young adults were more likely to live with a parent as were black and Hispanic young adults. Some of the other key findings include,
- The growing tendency of young adults to live with parents predates the Great Recession. In 1960, 20% of 18- to 34-year-olds lived with mom and/or dad. In 2007, before the recession, 28% lived in their parental home.
- In 2014, 40% of 18- to 34-year-olds who had not completed high school lived with parent(s), the highest rate observed since the 1940 Census when information on educational attainment was first collected.
- Young adults in states in the South Atlantic, West South Central and Pacific United States have recently experienced the highest rates on record of living with parent(s).
- With few exceptions, since 1880 young men across all races and ethnicities have been more likely than young women to live in the home of their parent(s).
- The changing demographic characteristics of young adults—age, racial and ethnic diversity, rising college enrollment—explain little of the increase in living with parent(s) (8-9)
It seems like unemployment and underemployment; student debt; and postponement or retreat from the institution of marriage all play a role in delaying young adult household formation.
My own idiosyncratic takeaway from the report is that, boy, the way we live now sure is different from how earlier generations lived (look at the graph on page 4 to see what I mean). Moreover, there is no reason to think that one way is more “natural” or better than the other. That being said, it sure is worth figuring out what we are doing now in order to craft policies to properly respond to it.
May 27, 2016 | Permalink | No Comments
May 25, 2016
Evicted by Homeowners Association
Realtor.com quoted me in Homeowner Evicted for Not Paying HOA Dues: Can This Happen to You? It opens,
Who knew? Even if you pay your mortgage on time every month, your home can still be foreclosed on and sold from under your feet. That, at least, is what Triss McQuiston from Tomball, TX, learned recently when she was notified that she’d have to vacate her place. Why? It turns out she was evicted for not paying her HOA dues.
According to ABC13, McQuiston admits that she was guilty of procrastinating on paying her HOA fees to the Canyon Gate at Northpointe Owners Association in 2014 and 2015. Because she was opening a new business, her HOA bills slipped through the cracks, for a grand total of $1,800 in unpaid dues.
An attorney for the HOA claims that since March 2014, they’d sent McQuiston 12 notices by first-class certified mail to collect these assessments, warning her what would happen if she didn’t. When they received no response, they proceeded with the foreclosure, and sold the home at auction back in September.
Yet McQuiston argues that she’d received no warnings, and was made aware of her dire straits only when she received an eviction notice on her doorstep on May 20. She has since hired an attorney to help fight the case and remain in her home.
“I would never have thought in my wildest dreams that an HOA … would go to these lengths and they’d have this much power,” McQuiston told ABC13.
If this story has you viewing HOAs in a harsh (and terrifying) new light, we don’t blame you. And while the laws vary by state, it turns out that in most cases, HOAs really do have the power to foreclose on your home for unpaid dues, as do condo owners associations.
“Contrary to common perceptions, even if a person is current on a mortgage, the HOA or COA may foreclose,” says Bob Tankel, a Florida attorney specializing in HOA law. “What’s the moral of the story? Pay your assessments. These are not huge amounts. People apparently think that just because assessments are small there’s nothing bad that can happen. But that’s not true.”
To know specifically how your HOA or COA handles late payments, homeowners should “check the Declaration of Covenants, Conditions & Restrictions (CC&Rs),” says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. You should check not only what constitutes a late payment, but also how you’ll be penalized; additional fees could include late charges, fines, interest, as well as attorneys’ fees.
It’s also smart to check what rights and recourse you have in your state if you end up unable to pay these assessments. “Some states have enacted some procedural protections for homeowners,” says Reiss. “It’s worth figuring those out if you are not able to pay off your HOA right away.”
May 25, 2016 | Permalink | No Comments
May 24, 2016
FIRREA Blanks
The Court of Appeals for the Second Circuit reversed the District Court’s judgment (SDNY, Rakoff, J.) against Bank of America defendants for actions arising from Countrywide’s infamous “Hustle” mortgage origination program. The case has a lot of interesting aspects to it, not the least of which is that it does away with more than one billion dollar in civil penalties levied against the defendants.
The opinion itself answers the narrow question, when “can a breach of contract also support a claim for fraud?” (2) The Court concluded that “the trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises.” (3)
I think the most important aspect of the opinion is how it limits the reach of the Financial Institutions Reform, Recover, and Enforcement Act of 1989 (FIRREA). Courts have have been reading FIRREA very broadly to give the federal government immense power to go after financial institutions accused of wrongdoing.
FIRREA provides for civil penalties for violations of federal mail or wire fraud statutes, but the Court found that there was no fraud at all. It made its point with a hypothetical:
Imagine that two parties—A and B—execute a contract, in which A agrees to provide widgets periodically to B during the five-year term of the agreement. A represents that each delivery of widgets, “as of” the date of delivery, complies with a set of standards identified as “widget specifications” in the contract. At the time of contracting, A intends to fulfill the bargain and provide conforming widgets. Later, after several successful and conforming deliveries to B, A’s production process experiences difficulties, and the quality of A’s widgets falls below the specified standards. Despite knowing the widgets are subpar, A decides to ship these nonconforming widgets to B without saying anything about their quality. When these widgets begin to break down, B complains, alleging that A has not only breached its agreement but also has committed a fraud. B’s fraud theory is that A knowingly and intentionally provided substandard widgets in violation of the contractual promise—a promise A made at the time of contract execution about the quality of widgets at the time of future delivery. Is A’s willful but silent noncompliance a fraud—a knowingly false statement, made with intent to defraud—or is it simply an intentional breach of contract? (10)
This case emphasizes that “a representation is fraudulent only if made with the contemporaneous intent to defraud . . .” (14) While this is not really new law, it is a clear statement as to the limits of FIRREA. This will act as a limit on how the government can deploy this powerful tool as new cases crop up. Unless, of course, the Supreme Court were to reverse it on appeal.
May 24, 2016 | Permalink | No Comments
May 23, 2016
Why Are There Real Estate Agents?
Realtor.com (admittedly not a neutral source on this topic) quoted me in 6 Reasons Real Estate Agents Aren’t Extinct. It opens,
It’s 2016, and it seems our need for real live people is ever-diminishing. There’s self-checkout instead of cashiers, selfie sticks instead of photographers, self-driving cars, self-watering plants, self-administered colonoscopies … well, you get the idea. Given that technology has become so important to buying and selling homes, you’d also think real estate agents would be a dying breed — yet they aren’t showing any signs of slowing down, with approximately 2 million active real estate agents throughout the country.
So why did real estate agents make the technology transition fully intact as opposed to, say, travel agents? We asked some experts to weigh in.
Reason No. 1: Selling is complicated
For many people, “a real estate transaction is financially momentous and complex — the most complex transaction people do in their life,” explains David Reiss, a law professor and academic program director for the Center for Urban Business Entrepreneurship at Brooklyn Law School.
Comparatively, personal travel agents — the kind where you’d walk in their office and have them book you a hotel and a flight — have gone the way of the dodo, because now that’s all simple DIY stuff (to be fair, not all travel agents are out of a job — there’s still a healthy travel agency sector that thrives on corporate and luxury bookings).
“People like having an expert when dealing with large, complicated transactions,” says Jeff Tomasul, founder of Vespula Capital LLC, an investment management company based in Greenwich, CT. “Why do people still have financial advisers? They want someone who does it full-time to make sure they are not doing anything wrong.” Same with real estate agents.
And real estate transactions are often anything but straightforward. Some deals, like short sales, can be “much more intricate than a regular transaction,” Reiss says, with lenders who have requirements that “a regular person would have no idea about.”
Reason No. 2: Buying ain’t easy, either
Buying a home, even if you come in with all cash, is not a cookie-cutter task, and you can find yourself drowning in paperwork and stressed out juggling things like meeting buyers, and dealing with the seller’s agent, lender, and title companies. Agents ease the whole transaction, and it’s something that has kept their profession alive.
“They can hold your hand through the process,” Reiss explains. “They might say, ‘This lender takes a long time, so put in your contract immediately and sign this and that paper and get all this stuff ready before you’re walking over hot coals with the lender for money.”
Reason No. 3: It’s their top priority
Your own interests and priorities will very likely always be split — because of those pesky little things like, say, job and family — but a Realtor can be laser-focused on getting the deal done. “A Realtor has a singular aim: to sell houses,” Reiss says.
Simply put, having a real estate agent can make your life easier. Tomasul found himself in a frustrating position when he tried to sell his apartment in Manhattan without an agent. “Showing it was so tough with my schedule, and it was hard having a full-time job and keeping up in a timely matter with potential buyers,” he recalls.
That means the less you make time for buyers, the longer your place will stay on the market — and that’s not good for your bottom line.
Reason No. 4: They know the market, and the players, better than you
“The agent knows the market intimately, even more than a pretty informed resident,” Reiss says. And all that knowledge saves time. “Tracking sales, knowing listings, spending a lot of shoe leather on houses already for sale — right off the bat, they know more than the ordinary Joe and Jane. They understand condo boards and title companies. As a player in the game, they know what the other players are looking for and how to deliver.”
Reason No. 5: They’re objective
Without an agent showing your house for you, you have no shield from criticisms that can — and will — be made about your house from prospective buyers. Your favorite room in the home might be described as “tacky,” “needing a renovation,” or much worse. Sometimes such comments are negotiating tactics. Sometimes they are heartfelt, off-the-cuff opinions. But either way, they can lead to problems.
“It impacts objectivity for a seller to hear negative things about their own place,” Reiss explains. ” Realtors aren’t emotionally invested. They don’t take comments personally. It’s not ‘Oh, you don’t like my chandelier? Then get out of my house.’”
May 23, 2016 | Permalink | No Comments
May 20, 2016
White-Segregated Subsidized Housing
The University of Minnesota Law School’s Institute on Metropolitan Opportunity has issued a report, The Rise of White-Segregated Subsidized Housing. While the report is focused on Minnesota, it raises important issues about affordable housing program demographics throughout the country:
- To what extent do the populations served by programs match those of their catchment areas?
- To what extent do the served populations match the eligible populations of their catchment areas?
- To what extent do the served populations match the demographics of those who have applied for the programs?
- To what extent do variants among those metrics matter?
The Executive Summary opens,
Subsidized housing in Minneapolis and Saint Paul is segregated, and this segregation takes two forms – one well-known, and the other virtually unknown.
At this point it is widely recognized that most Minneapolis and Saint Paul subsidized housing is concentrated in racially diverse or segregated neighborhoods, with few subsidized or otherwise-affordable units in affluent, predominately white areas. Because subsidized units are very likely to be occupied by families of color, this pattern increases the region’s overall degree of segregation.
But what has been overlooked until today, at least publicly, is that a small but important minority of subsidized projects are located in integrated or even-predominately white areas. Unlike typical subsidized housing, however, the residents of these buildings are primarily white – in many instances, at a higher percentage than even the surrounding neighborhood. These buildings thus reinforce white residential enclaves within the urban landscape, and intensify segregation even further.
What’s more, occupancy is not the only thing distinguishing these buildings from the average subsidized housing project. They are often visually spectacular, offering superior amenities – underground parking, yoga and exercise studios, rooftop clubrooms – and soaring architecture. Very often, these white-segregated subsidized projects are created by converting historic buildings into housing, with the help of federal low-income housing tax credits, historic tax credits, and other sources of public funding. Frequently, these places are designated artist housing, and – using a special exemption obtained from Congress by Minnesota developers in 2008 – screen applicants on the basis of their artistic portfolio or commitment to an artistic craft.
These places cost far more to create than traditional subsidized housing, and include what are likely the most expensive subsidized housing developments in Minnesota history, both in terms of overall cost and per unit cost. These include four prominent historic conversions, all managed by the same Minneapolis-based developer – the Carleton Place Lofts ($430,000 per unit), the Schmidt Artist Lofts ($470,000 per unit), the upcoming Fort Snelling housing conversion ($525,000 per unit), and the A-Mill Artist lofts ($665,000 per unit). The combined development cost of these four projects alone exceeds $460 million. For reference, this is significantly more than the public contribution to most of the region’s sports stadiums; it is $40 million less than the public contribution to the controversial downtown football stadium.
These four buildings contained a total of 870 units of subsidized housing, most of which is either studio apartments or single-bedroom. For the same expense, using 2014 median home prices, approximately 1,590 houses could have been purchased in the affluent western suburb of Minnetonka.
In short, Minneapolis and Saint Paul are currently operating what is, in effect, a dual subsidized housing system. In this system, the majority of units are available in lower-cost, utilitarian developments located in racially segregated or diverse neighborhoods. These units are mostly occupied by families of color. But an important subset of units are located in predominately white neighborhoods, in attractive, expensive buildings. These units, which frequently are subject to special screening requirements, are mostly occupied by white tenants.
As a matter of policy, these buildings are troubling: they capture resources intended for the region’s most disadvantaged, lowest-income families, and repurpose those resources towards the creation of greater segregation – which in turn causes even more harm to those same families.
Legally, they may well run afoul of the Fair Housing Act and other civil rights law. Recent developments have established that the Fair Housing Act forbids public or private entities from discriminating in the provision of housing by taking actions that create a disparate impact on protected classes of people, including racial classes. Moreover, recipients of HUD funding, such as the state and local entities which contribute to the development of these buildings, have an affirmative obligation to reduce segregation and promote integration in housing. (1-2)
No doubt, this report will spur a lot of soul searching in Minnesota. It may also spur some litigation. Other communities with subsidized housing programs should take a look at themselves in the mirror and ask if they like what they see. They should also ask whether federal judges would like it.
May 20, 2016 | Permalink | No Comments
May 26, 2016
Unruly Arbitration
By David Reiss
I had blogged earlier about the Consumer Financial Protection Bureau’s proposed rule regarding arbitration. Along with 209 other law professors, I submitted a comment letter regarding it. The letter opens,
We write to strongly support proposed regulation CFPB-2016-0020, RIN 3170-AA51. We are 210 law professors and scholars who teach and write in such disciplines as civil procedure, contracts, consumer law, financial services law, and dispute resolution. This regulation would accomplish two important goals. First, it would bar companies that provide consumer financial products and services from imposing pre-dispute arbitration clauses combined with class action waivers. Second, the proposed regulation would require regulated parties to collect and transmit to the Consumer Financial Protection Bureau (“CFPB”) information regarding use of arbitration in the consumer financial context.
As a group of experienced legal academics, we approach the issues of pre-dispute arbitration clauses and bans on class proceedings from a myriad of different perspectives and political sensibilities. Nonetheless, based on our varied scholarship and teaching backgrounds, we all agree (1) it is important to protect financial consumers’ opportunity to participate in class proceedings; and (2) it is desirable for the CFPB to collect additional information regarding financial consumer arbitration.
The benefits and detriments of both forced arbitration and class actions have been debated vigorously for over twenty years in academia, as well as in litigated cases, Congressional hearings and among the general public. Although some good empirical work has been done on these issues, scholars have consistently asserted the need for more and better data-driven studies. Too often, heated discussions have been based on speculation, rather than data; this is especially problematic given the largely private world of confidential arbitration. Accordingly, we were very pleased when Congress, in enacting the Dodd-Frank Wall Street Reform and Consumer Protection Act, mandated in Section 1028(a) that the CFPB study “the use of agreements providing for arbitration of any future dispute . . . in connection with the offering or providing of consumer financial products or services. . . .” After soliciting suggestions on how to conduct such a study, receiving and incorporating ideas from many corners, and spending three years collecting and analyzing massive amounts of data, the CFPB produced a comprehensive and impressive report in March 2015.The results of this study support the proposed regulation, as discussed below.
CFPB’s study clearly shows that pre-dispute arbitration clauses are extremely common in the consumer financial context, and, indeed, are becoming standard practice across a number of different industries. While the incidence of pre-dispute arbitration clauses varies substantially depending on the consumer product or service, CFPB found that mobile wireless and payday loan contracts virtually always compelled consumers to resolve future disputes through arbitration, and that checking account and credit card contracts mandated arbitration roughly half of the time.2 The CFPB study also found that almost all of the studied arbitration clauses precluded affected consumers from participating in class actions. Yet, despite the prevalence of these clauses, the CFPB found that the majority of financial consumers are not entering into these arbitration clauses knowingly. Based on a national telephonic survey of credit card holders, the CFPB determined, unsurprisingly, that most consumers simply did not focus on dispute resolution clauses when deciding on a credit card, and the vast majority did not understand the implications of forced arbitration. Less than seven percent of consumers whose credit card agreements included arbitration provisions understood that they were precluded from suing the company in court should a dispute arise.
As a group, we have varying perspectives on whether the CFPB regulation goes far enough. Some among us believe the agency should issue a broader regulation banning forced arbitration clauses altogether in consumer financial contracts, whether or not these clauses contain class action waivers. Others among us believe that using pre-dispute arbitration agreements in the consumer context may not be harmful, or may even be beneficial, apart from the class action prohibition. And, still others among us are not sure where they stand on the desirability of banning forced arbitration in this context. Nonetheless, these differences in our perspectives do not undercut our strong agreement that the CFPB is right to both prevent companies from using arbitration to take away financial consumers’ opportunity to participate in class proceedings and require the submission of additional data and information that will allow the agency to further study this important area. We believe that the proposed regulations are critically important to protect consumers and serve the interests of the American public. (1-2, footnotes omitted)
Jean Sternlight at UNLV led the effort to get this letter to the CFPB.
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May 26, 2016 | Permalink | No Comments