The Foreclosure Crisis and the Antifragmentation Principle in State Property Law
Many thanks to Lee Fennell, Susan Koniak, Adam Levitin, Claire Priest, Julie Roin, and Jacob Sagi.
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This Article explains how excessive fragmentation of property interests in mortgages has prevented reasonable modifications in loan terms and helped to create the current foreclosure crisis. The Article argues that Anglo-American property law reflects an antifragmentation principle. This principle offers historical grounding for and constitutional legitimacy to proposals to restructure the servicing of troubled loans so as to produce loan modifications when doing so would produce more net economic value than foreclosure. The Article also considers some reforms that could be adopted to prevent future cycles of excessive fragmentation of property interests in mortgages.
For very helpful feedback on prior versions of this piece, I thank Russell Engler, David Luban, David Hoffman, Tal Kastner, Timothy Mulvaney, Michael Pollack, Tanina Rostain, Kathryn Sabbeth, Emily Saltzberg, Emily Satterthwaite, Jessica Steinberg, Neel Sukhatme, and Josh Teitelbaum. This Article benefited from presentations at the Harvard-Yale-Stanford Junior Faculty Forum, the Law and Society Association Annual Meeting, the 2024 Access to Justice Roundtable, the Property Worksin- Progress Workshop, the State and Local Courts Workshop, and the State and Local Government Law Workshop. Emmeline Basco provided excellent research assistance and Yi Yao provided excellent assistance with data analysis. I am very grateful to the editors of The University of Chicago Law Review for their outstanding editorial work. All errors are my own.
Eviction cases make up over a quarter of all cases filed in the federal and state civil courts and have enormous consequences for tenants, who are nearly always unrepresented by counsel. These cases overwhelmingly settle, yet settlement scholars have entirely overlooked eviction both empirically and theoretically. The Article presents results from the first empirical study of eviction settlement negotiations. The study involved rigorous analysis of an original dataset of over one thousand hand-coded settlements, observations of settlement negotiations in the hallways of housing court, and dozens of interviews. The findings demonstrate that unrepresented tenants—who make up the vast majority of tenants in the eviction system—have no meaningful influence over settlement terms. Rather, the terms are set by landlords and their attorneys. Drawing on the empirical findings and scholarship about contracts of adhesion, the Article develops the theoretical concept of “settlements of adhesion.”
This Essay was written, in part, while Schottenfeld was a lawyer for the NAACP, but it does not necessarily reflect the views of the NAACP. Both of us have worked with or represented members of the Sandridge community and other communities mentioned in this Essay; the views expressed in this Essay are ours alone, but we are deeply grateful for the inspiration and insight we have drawn from these communities and their members. We thank Richard Buery, Devon Carbado, David Chen, Daniel Harawa, and Erika Wilson for their very helpful comments on earlier drafts. We are grateful to Chloe Bartholomew, Suchait Kahlon, Nina McKay, and Briana Thomas for their research assistance; to Kathleen Agno for her ongoing research support; and to Helen Zhao and the editors of The University of Chicago Law Review for greatly improving this Essay. We also appreciate the insights received from participants of the Lutie Lytle Black Women Scholarship Workshop. Finally, we gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund, New York University School of Law.
This Essay was written, in part, while Schottenfeld was a lawyer for the NAACP, but it does not necessarily reflect the views of the NAACP. Both of us have worked with or represented members of the Sandridge community and other communities mentioned in this Essay; the views expressed in this Essay are ours alone, but we are deeply grateful for the inspiration and insight we have drawn from these communities and their members. We thank Richard Buery, Devon Carbado, David Chen, Daniel Harawa, and Erika Wilson for their very helpful comments on earlier drafts. We are grateful to Chloe Bartholomew, Suchait Kahlon, Nina McKay, and Briana Thomas for their research assistance; to Kathleen Agno for her ongoing research support; and to Helen Zhao and the editors of The University of Chicago Law Review for greatly improving this Essay. We also appreciate the insights received from participants of the Lutie Lytle Black Women Scholarship Workshop. Finally, we gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund, New York University School of Law.
Historic discrimination in the process of siting and constructing physical infrastructure has sacrificed the Black communities that bear the costs associated with new roads, power lines, and sewage plants while receiving few of the benefits. This Essay advances a "community equity" framework to recognize and protect the sources of value that people hold in their communities. This approach looks beyond the traditional domains of civil rights and land use law. Instead, it embraces analogies in public nuisance and common law torts doctrines as mechanisms for recognizing community harms above and beyond the aggregate of individual claims.
This Essay was written, in part, while Schottenfeld was a lawyer for the NAACP, but it does not necessarily reflect the views of the NAACP. Both of us have worked with or represented members of the Sandridge community and other communities mentioned in this Essay; the views expressed in this Essay are ours alone, but we are deeply grateful for the inspiration and insight we have drawn from these communities and their members. We thank Richard Buery, Devon Carbado, David Chen, Daniel Harawa, and Erika Wilson for their very helpful comments on earlier drafts. We are grateful to Chloe Bartholomew, Suchait Kahlon, Nina McKay, and Briana Thomas for their research assistance; to Kathleen Agno for her ongoing research support; and to Helen Zhao and the editors of The University of Chicago Law Review for greatly improving this Essay. We also appreciate the insights received from participants of the Lutie Lytle Black Women Scholarship Workshop. Finally, we gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund, New York University School of Law.
This Essay was written, in part, while Schottenfeld was a lawyer for the NAACP, but it does not necessarily reflect the views of the NAACP. Both of us have worked with or represented members of the Sandridge community and other communities mentioned in this Essay; the views expressed in this Essay are ours alone, but we are deeply grateful for the inspiration and insight we have drawn from these communities and their members. We thank Richard Buery, Devon Carbado, David Chen, Daniel Harawa, and Erika Wilson for their very helpful comments on earlier drafts. We are grateful to Chloe Bartholomew, Suchait Kahlon, Nina McKay, and Briana Thomas for their research assistance; to Kathleen Agno for her ongoing research support; and to Helen Zhao and the editors of The University of Chicago Law Review for greatly improving this Essay. We also appreciate the insights received from participants of the Lutie Lytle Black Women Scholarship Workshop. Finally, we gratefully acknowledge support from the Filomen D’Agostino and Max E. Greenberg Research Fund, New York University School of Law.
Historic discrimination in the process of siting and constructing physical infrastructure has sacrificed the Black communities that bear the costs associated with new roads, power lines, and sewage plants while receiving few of the benefits. This Essay advances a "community equity" framework to recognize and protect the sources of value that people hold in their communities. This approach looks beyond the traditional domains of civil rights and land use law. Instead, it embraces analogies in public nuisance and common law torts doctrines as mechanisms for recognizing community harms above and beyond the aggregate of individual claims.