DRAFT December 10, 2015 Real Estate Finance Spring 2016

Transcription

1 UNIVERSITY OF BALTIMORE SCHOOL OF LAW SPRING SEMESTER 2016 Course: Instructor: Class hours: LAW 753, Real Estate Finance, 3 credits Nina F. Simon, Esq. Phone: (202) nsimon@ubalt.edu Office hours by appointment Monday/Wednesday 6:15-7:30 p.m. Location: Room 408 Course summary: Real Estate Finance will be taught with the Mortgage Crisis as backdrop. An introduction to the practices and events leading up to the Mortgage Crisis will inform students understanding of structural elements of residential mortgage finance transactions, including real estate contracts, mortgages/deed of trust, mortgage substitutes, rights and duties of mortgagor and mortgagee, abuses of the mortgage and mortgage substitute and foreclosure. Students will also be exposed to and practice using new real estate closing documents that went live in October (Truth in Lending and RESPA Integrated Disclosures mandated by federal law in the wake of the mortgage crisis.) Prerequisite: Contracts I & II; Property. Course materials: REAL ESTATE TRANSFER, FINANCE, AND DEVELOPMENT, Cases and Materials, 9 th Ed ( text ) All other assigned reading will be on the course TWEN page. Course Objectives and Outcomes: (or Concepts and Goals) Students will gain an understanding of the following concepts: Basics of real estate finance transactions affecting homes; Real estate finance makes possible the American Dream of homeownership when properly employed to offer fair financing based on objective credit characteristics; Real estate finance can also lead to an American nightmare when predatory lending, fraudulent appraisal, discrimination, and other unfair and deceptive practices are employed Other factors led to the mortgage crisis, including preemption and mandatory arbitration. Foreclosure Regulatory framework designed to facilitate fair and sound lending practices and to prevent future crises. 1

2 Grades: Grades will be calculated as follows: Class preparation and participation 20% Midterm exam 20% Drafting exercise 10% Final Exam Date TBA 50% Assignments/ Participation: Assigned readings for each class are set forth below. You are expected to complete all reading assignments and to consistently participate in class discussions in order to demonstrate that you have read and reflected on the issues raised in the assignments. In addition to the assigned readings, you will be provided with paper or electronic copies of sample transactional documents that should be reviewed and analyzed for class discussion. Any revisions to the schedule or assignments will be noted to you in advance and the syllabus adjusted accordingly. Attendance: Class attendance is a primary obligation of each student whose right to continued enrollment in the course and to take the examination is conditioned upon a record of attendance satisfactory to the professor. A student who exceeds the maximum allowed absences (5 absences) may be compelled to withdraw from the course, or may be barred from sitting for the final exam. Students who are forced to withdraw for exceeding the allowed absences may receive a grade of FA (failure due to excessive absence). This policy is consistent with American Bar Association Standards for Law Schools. Course Web Page: This course will have a TWEN webpage that links to this syllabus, announcements, the class assignments, helpful treatises, overheads, handouts, and/or other class materials. You are responsible for self- enrolling in TWEN and you should check the TWEN page regularly. Computers: Students may use laptop computers for class related purposes only. However, any disruptive computer use in class will affect the student s participation grade. Computer use may be restricted or prohibited during sessions with guest speakers. Class Cancellation: If the instructor must cancel a class, notices will be sent to students via and posted on the classroom door. If there is inclement 2

3 weather, students should visit the University of Baltimore web page or call the University's Snow Closing Line at (410) If the University is not closed, students should presume that classes are running on the normal schedule. Academic Integrity: Students are obligated to refrain from acts that they know or, under the circumstances, have reason to know will impair the academic integrity of the University and/or the School of Law. Violations of academic integrity include, but are not limited to: cheating; plagiarism; misuse of library materials; use of another s book or study materials without consent; unapproved multiple submissions; material misrepresentation of one s academic history or standing; misrepresentation of any academic matter; intentionally giving another student false or inaccurate information about class requirements; inappropriate discussion of exams; and misrepresenting or falsifying class attendance reports. [Reference to School of Law Honor Code ] Disability Policy: If you are a student with a documented disability who requires an academic accommodation, please contact Karyn Schulz, Director of Disability Support Services at or via at kschulz@ubalt.edu. 3

4 ASSIGNMENTS You ll notice there are no assignments from the text for the first week of classes so you don t need to bring the text to class if you have print copy. BUT the text is critical for the course and we will use it beginning January 20th. January The Mortgage Crisis As Backdrop Day 1 January 11 Predatory mortgage terms and mortgage broker abuses Mills v. Home Equity Group, 871 F. Supp (DDC 1994) EXPERIENCES OF OLDER REFINANCE MORTGAGE LOAN BORROWERS: BROKER- AND LENDER-ORIGINATED LOANS AARP Public Policy Institute (2003) Commonwealth of Massachusetts v. Fremont (excerpt) Amicus brief of consumer advocacy organizations in Commonwealth of Massachusetts v. Fremont (excerpt) Yield Spread Premiums: A Powerful Incentive for Equity Theft (Center for Responsible Lending 2004) Day 2 January 13 Unconscionability in mortgage lending Williams v. Walker-Thomas Furniture, 350 F. 2d 445 (DC Cir. 1965) Carboni v. Arrospide, 2 Cal. Rptr 2d 845, 2 Cal. App. 4th 76 (1991) Family Financial Servs., Inc. v. Spencer, 41 Conn. App. 754, 677 A. 2d 479 (1996) (excerpt) Williams v. First Gov t Mortg. & Inv. Corp., 225 F. 2d 738 (DC Cir. 2000) (excerpt) NO CLASS MARTIN LUTHER KING S BIRTHDAY -January 18 Day 3 January 20 Property flipping and appraisal fraud Hoffman v. Stamper, 867 A.2d 276 (Md. 2005) (excerpt) Homeward Residential, Inc. v. Sand Canyon Corp., 298 F.R.D. 116 (2014) (excerpt) Chapter 8, pp (text) Day 4 January 25 Discriminatory targeting of predatory lending aka reverse redlining Chapter 8, pp , (text) Hargraves v. Capital City Mortgage Co., 140 F.Supp.2d 7 (DDC 2000) (excerpt) 4

5 Debbie Gruenstein Bocian, Keith S. Ernst & Wei Li, Ctr. For Responsible Lending, Unfair Lending: The Effect of Race and Ethnicity on the Price of Subprime Mortgages (May 31, 2006) (executive summary) (evidence and analysis links pricing disparities with broker activity and incentives) Barkley v. Olympia Mortg. Co., 2007 WL (EDNY 2007) (excerpt) Day 5 January 27 How preemption and court doctrines favoring mandatory arbitration allowed predatory practices to flourish Cuomo v. Clearinghouse, 129 S.Ct (2009) (excerpt of amicus brief ) American Financial Servs. Ass n v. City of Oakland, 34 Cal. 4th 1239, 104 P.3d Cal.Rptr.3d 453 (2005) Delta Funding Corp. v. Harris, 396 F.Supp.2d 512 (DNJ 2004) Day 6 February 1 Real Estate Contracts Statute of Frauds Chapter 1, pp , 31-45(text) Beall v. Beall, 291 Md 224, 434 A. 2d 1015 (1981) (excerpt) Day 7 February 3 Real Estate Contracts--Specific performance Chapter 1, pp (text) Romm v. Flax, 340 Md. 690, 668 A 2d 1 (1995) (excerpt) Day 8 February 8 Real Estate Contracts (discrimination) & Mortgages Meyer v. Crank, 400 F.3d 667 (9th Cir. 2005) (excerpt) Mortgages Chapter 1, pp (text) CFPB reading Day 9 February 13 Deeds and Title Chapter 2, pp , , , (text) Day 10 February 15 Deeds and Title Chapter 2, pp (text) Maryland adverse possession case argued in Maryland Court of Appeals, 12/03/15 Presentation will also run through information pp (text) do not read Day 11 February 17 Andrew Pariser, Realtor, guest lecturer Speaker will review standard real estate contract, discuss common problems in home purchase transactions and how to avoid them 5

6 And troubleshoot Read posted standard real estate contract posted on TWEN Review notes from previous classes on real estate contracts, mortgages and deeds and title Day 12 February 21 Mortgage substitutes land contracts Chapter 3, pp. (text) Day 13 February 23 Predatory use of mortgage substitutes Chapter 3, pp. (text) Link to NCLC readings on foreclosure rescue scams and land contracts Day 14 February 29 Transfer and Discharge Chapter 5, ; (text) Day 15 March 2 Foreclosure Chapter 6, pp. (text) Day 16 March 7 Foreclosure Chapter 6, pp. (text) Tom Cox as guest speaker mock trial Trial transcript and exhibits on TWEN Day 17 March 9 Midterm exam SPRING BREAK March Day 18 March 21 Foreclosure and Loan Modification Chapter 6, pp (text) Morrow v. Bank of America, 375 Mont. 38, 324 P.3d 1167 (Mont. 2014) Day 19 March 23 Priority problems Chapter 7, pp. (text) Day 20 March 28 Federal Regulation of the Mortgage Market Chapter 8, pp. (text) 6

7 Day 21 March 30 Federal Regulation of the Mortgage Market Chapter 8, pp. (text) Predatory and discriminatory practices continue into the crisis: Saint-Jean v. Emigrant Mortgage Co., 50 F.Supp.3d 300 (EDNY 2014) (excerpt) Day 22 Apr 4 Addressing the Crisis: Mortgage Disclosure Improvement Act Chapter 8, pp. 1138, (text) State and federal enforcement actions: selected readings Day 23 Apr 6 The Federal Government Strikes Back: The Dodd-Frank Wall Street Reform and Consumer Protection Act L. Singer, N. Simon & Z. Best, Breaking Down Financial Reform, A Summary of the Major Consumer Protection Portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 14 Journal of Consumer & Commercial Law 1, Fall 2010, State Bar of Texas Chapter 8, pp. (text) Day 24 Apr 11 New rules of the road for originating safer mortgages Chapter 8, pp. (text) CFPB Basic guide for lenders, What is a Qualified Mortgage? CFPB Ability-to-Repay and Qualified Mortgage Rule (excerpt) Day 25 Apr 13 Know Before You Owe TILA RESPA Integrated Disclosures (TRID) The new loan closing documents Applying the new rules a drafting exercise Day 26 Apr 18 Reverse mortgages Ch. 8, pp (text) Bennett v. Donovan, 703 F. 3d 582 (D.C. Cir. 2013) (excerpt) Day 27 Apr 20 Recent Supreme Court cases affecting real estate finance Texas Dep t Housing & Community Affairs v. Inclusive Communities Project, 135 S. Ct (2015) (excerpt) disparate impact Jesinoski v. Bank of America, 135 S. Ct. 790 (2015) Truth in Lending Day 28 Apr 25 Recent Supreme Court cases affecting real estate finance 7

8 Bank of America v. Caulkett, 135 S. Ct (2015) (Ch. 7 bankruptcy lien stripping/cramdown) Makeup Days Apr 26, 27 Exam Period May 2-12 Grades Due--June 1 8