REFinBlog

Editor: David Reiss
Brooklyn Law School

September 8, 2020

The Changing Architecture of Real Estate Law Education

By David Reiss

Washburn Professor Andrea J. Boyack

The Association of American Law School Section on Real Estate Transactions and the Section on Academic Support are doing a call for Statements of Interest for those interested in presenting at an AALS panel meeting in January of next year. Panelists should be prepared to answer some or all of the following questions:

What real property law courses should law schools be teaching?

Who should be teaching these courses?

How should the courses be taught?

The Section on Real Estate Transactions and the Section on Academic Support seek to explore these questions and related issues at their joint online session during the 2021 AALS Annual Meeting, The Changing Architecture of Approaches to Legal Education: Real Estate Transactions as a Case Study.

Members of the legal academic community are invited to submit statements of interest in joining the panel of presenters who will discuss the following in the context of real property law and related courses (mortgage finance, securitization, commercial leasing, housing law, real estate development, etc.):

  • Law schools’ curricular choices
  • Course content and design
  • Teaching and pedagogy application.

As explained more in the “Background” section below, the Sections are specifically looking to highlight issues related to course offerings, curricular design, and teaching methodologies that can better prepare students for modern practice and ensure student achievement of course objectives. Statements of interest (including a description/summary of your proposed presentation) should be emailed to Andrea Boyack at andrea.boyack@washburn.edu by September 17, 2020.

There is no formal paper requirement associated with participation on the panel.

**Note that the AALS Annual Meeting in January 2021 will be held in a completely digital format, and individual registration fees will not be charged for participation in/attendance at the Annual Meeting.**

Background/Program Overview:

In the past decade, legal education has experienced a number of body blows from which it still struggles to recover. In 2007, Educating Lawyers: Preparation for the Profession of Law (more commonly known as the “Carnegie Report”) criticized the academy for insufficiently preparing students for legal practice. In the aftermath of the 2008 Financial Crisis and global recession, many attorneys (especially from Big Law) were laid off and new graduates faced fewer and fewer job prospects. Mainstream and social media spotlighted lawyer and law student discontent, worries about sustainability of legal careers and the high cost of legal education, schools skewing data to try to game US News rankings, and the growing number of for-profit institutions. Law firms and their clients started exhibiting an increasing hesitancy with respect to hiring and training inexperienced attorneys. Law school admission rates tumbled as college graduates changed their opinions about the value of a legal education, as the ABA began making new demands of law schools pertaining to skills training and assessments. The practice of law, in the meantime, has changed dramatically, with automation, internet resources, and contract attorneys (or non-attorneys) taking the place performing tasks lawyers once controlled. Furthermore, schools have struggled to adapt to different expectations of the Millennial and Gen-Z generations of law students. Then, in March 2020, legal academia and law practice suddenly shifted to operating (temporarily?), primarily in the digital/virtual realm. The world has changed over the past 15 years, the practice of law has changed, and law schools struggle to adapt quickly enough to stay relevant and valuable.

The evolving demands and expectations for law schools are not just issues to be addressed by deans and administrators. Nor can the task of preparing new lawyers be allocated exclusively to clinicians and adjunct instructors of specialized “skills” classes. Doctrinal professors may want to also change their approach in the classroom in response to new industry demands for practice competencies and evolving attorney roles in an ever-changing marketplace, but have our pedagogical approaches adequately adapted to this new world? And how has law schools’ increasing reliance on adjunct professors impacted the students’ experience and preparation for the bar and beyond? In short: In what ways do we need to rethink what we teach and how we teach it in order to remain optimally relevant to tomorrow’s lawyers.

Eligibility:

Per AALS rules, faculty at fee-paid law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit a statement of interest.

September 8, 2020 | Permalink | No Comments

July 29, 2020

Insuring Homeownership — Best of the ABA

By David Reiss

The American Bar Association selected my short article, Insuring Sustainable Homeownership, as part of “The Best of ABA Sections”–a compilation of some of the best articles published by the ABA’s sections, forums, and divisions.  It was published in the ABA’s journal, GPSolo and it is drawn from Insuring Sustainable Homeownership,  published in  20 (March/April 2018).  It opens,

The Federal Housing Administration (FHA) has suffered from many of the same unrealistic underwriting assumptions that did in so many lenders during the 2000s. It, too, was harmed by a housing market as bad as any seen since the Great Depression. As a result, the federal government announced in 2013 that the FHA would require the first bailout in its history. At the same time that it faced these financial challenges, the FHA came under attack for poor execution of some of its policies attempting to expand homeownership opportunities. This article examines the criticism that has been leveled at FHA and the goals the agency should pursue.

July 29, 2020 | Permalink | No Comments

June 2, 2020

Non-debt Financing for Home Purchases

By David Reiss

Professor Shelby Green

I will be presenting on Non-Debt Financing for Home Purchase: Risks and Promises as part of the ABA’s Section of Real Property, Trust and Estate Law “Professors’ Corner.”  It will take place at 12:30 PM (Eastern Time) on June 9th.  The program is free for ABA members and non-members alike, although registration is required.  Professor Shelby D. Green of Pace University’s Elisabeth Haub School of Law will moderate.  The program description reads:

A new class of financing options is emerging, including non-debt or equity investment, either facilitating the initial purchase with no borrowing or enabling access to equity from existing homeownership. The presenter will discuss whether the surface appeal of these financing inventions may camouflage risks that if not disclosed and well-managed could portend disruption in the housing markets.

Update:  The slides for the presentation can be found here.

June 2, 2020 | Permalink | No Comments

May 28, 2020

Law in The Time of COVID: The Ripple Effect in Real Estate

By David Reiss

Dean Michael Cahill

In many ways, COVID-19 has changed the way we live for both the immediate future and long-term. Brooklyn Law School Dean Michael Cahill has been sitting down with members of the Brooklyn Law School faculty to discuss the legal ramifications of our response to COVID-19 and what a post-pandemic world may look like.  Here is the link to our discussion of the effect of the pandemic on the real estate market and beyond: https://youtu.be/j9DFBOsU3qw.

May 28, 2020 | Permalink | No Comments

February 20, 2020

Money, Government and Mortgages

By David Reiss

photo by By Chris McAndrew - https://api.parliament.uk/Live/photo/F7tZ5nm6.jpeg?crop=MCU_3:4&quality=80&download=trueGallery: https://beta.parliament.uk/media/F7tZ5nm6, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=67598699

Robert Skidelsky

I just finished reading Money and Government by Robert Skidelsky (2018).  It is a bit tough in parts for non-economists, but it is a great read for those trying to understand the appropriate relationship between economic theory and government policy.  While that may sound dry indeed, it is of key importance to the design of a post-Financial Crisis world regulatory order.

The book delves into the the “Mysteries of Money,” providing a short history of a deceptively simple topic that I continue to find to be difficult to wrap my head around:  what exactly is money and what can you do with it?  The book then goes into some inside baseball analysis of the history of economic thought.  I skimmed this section because it related some pretty technical debates among early economists to set up its more accessible discussion of Keynesian economics and its challenger, Milton Friedman-led Monetarism.  The book then takes a look at how economic theory impacted governments’ responses to the Financial Crisis, for good and for ill.

I think readers of this blog would be most interested by Skidelsky’s insights in the final section, where he tries to sketch “A New Macroeconomics.”  He asks and answers the question, “What Should Governments Do and Why?”  He wants to make banking safe and address inequality.

Readers of this blog will be particularly interested in his analysis and  recommendations for the mortgage market.  He argues that the “main theoretical mistake behind securitization was the assumption that securities are always liquid:  they can always be sold quickly and without (much) loss.”  (328)  The Financial Crisis demonstrated in spades that this was not true.  He argues that “[c]ompelling banks to hold mortgages for a period of years” is the solution to this particular problem.  (363) I do not think that I agree with this solution, but as he argues his point at a high level of generality, it probably is best to say that the devil will be in the details for any reform program in this sphere.

I found his analysis of populism compelling.  He argues that the “political divide between right and left . . . is increasingly overshadowed by one between nationalism and globalism.” (372)  I won’t go into the details here, but he has a very trenchant analysis of how the economist’s theoretical Homo economicus fails to account for important aspects of our humanity as individuals, as members of groups and as citizens of nation-states.  He warns that we do that at our peril:  citizens of democracies will punish their leaders for failing to take into account their complex need to flourish in all of those ways that economists can reduce down to one-dimensional units of measurement, such as “utility.”

Yale University Press says that the book is out of print, but Amazon has paperback copies available if you dig a bit on the book’s web page (and, of course, there are Kindle versions available for those so inclined).  I recommend that you get yourself a copy.

February 20, 2020 | Permalink | No Comments

February 19, 2020

Urban Renewal’s Legacy

By David Reiss

photo by Ziggymarley01

I was quoted in The Ledger (Florida) in Seeking Progress, City Upended Lives in Eliminating Moorehead Community. It opens,

After selecting Moorehead as the site of a new auditorium, Lakeland officials began efforts 50 years ago to inform residents, assess properties, make offers to owners and assist residents in finding new places to live.

Dividing the predominantly black neighborhood roughly in half, the city planned to acquire all of the eastern section north of Lime Street by 1971 and the remainder in 1972.

The campaign, which displaced 122 families, fit into a decades-long national phenomenon in which cities partially or completely removed minority neighborhoods for projects aimed at fostering urban renewal.

The American Housing Act of 1949, part of President Harry Truman’s “Fair Deal,” established the power of governments to seize private property for projects categorized as urban renewal. It also made federal funds available for such projects.

Though intended to replace substandard housing with better options, the Act spurred a flurry of activity that wound up displacing minorities, said David Reiss, a professor at Brooklyn Law School and academic program director of The Center for Urban Business Entrepreneurship. Cities used the program’s Title I funding to engage in what was sometimes called “Negro removal” or “slum clearance.”

Before the federal program was halted in 1974, some 2,500 urban renewal projects displaced about 1 million people nationwide, Reiss said.

“Two-thirds of those people were African-American, and if you think about African-Americans being 12 percent of the population, they were being displaced at a multiple, maybe at five times the rate of other Americans and particularly white Americans,” Reiss said. “So urban renewal really reshapes the urban fabric across the country.”

Property in minority communities tended to be cheaper to acquire, especially during the peak period of urban renewal, and Reiss said minorities also were less equipped to challenge authorities.

“It was structural racism on one level, where the majority would find it much easier to displace a black community than they would to displace a white community, although displacement wasn’t only in black communities — but as we see it’s overwhelmingly in black communities,” he said. “Because black communities were often poor, that would be another reason — being in a poor community would give you less political power to fight something like this.”

February 19, 2020 | Permalink | No Comments

January 29, 2020

Deed of Trust vs. Mortgage

By David Reiss

photo by Taber Andrew Bain

LendingTree quoted me in Deed of Trust vs. Mortgage: Key Differences. It reads, in part,

Foreclosure process

Each type of security instrument leads to a different type of foreclosure process. Deed of trust states typically have a non-judicial foreclosure process. “The trustee has the power under the terms of the deed of trust to actually sell the property,” said David Reiss, professor of law at Brooklyn Law School and real estate expert. “That can happen in some jurisdictions in a matter of weeks or a matter of a few months.”

A deed of trust foreclosure doesn’t involve going to court. In mortgage states, though, the lender must get a court order to foreclose on a home. This is called a judicial foreclosure. “In many jurisdictions, particularly in New York and New Jersey, [a judicial foreclosure] could take years to actually do,” Reiss said. “From a lender perspective, that’s not so great.”

Your state’s laws will determine which security instrument you use and which type of foreclosure process lenders are required to follow. Some states allow both types of foreclosures, but non-judicial foreclosures are more common than judicial foreclosures. The states that primarily use a non-judicial foreclosure process are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Georgia, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Oregon, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wyoming and the District of Columbia.

January 29, 2020 | Permalink | No Comments