Eminent Domain for the Seizure of Underwater Mortgages

Sarah Thompson*

3 U. Mich. J.L. Reform 22A (pdf)

Like many cities in the United States, Richmond, California suffered greatly from the recent mortgage crisis. The foreclosure crisis hit Richmond hard in 2009, when more than 2,000 homes in Richmond went into foreclosure.1 This figure is especially shocking given that there were 18,659 owner-occupied housing units in the city at that time.2 In 2012, the city saw an additional 914 foreclosures and a foreclosure rate of thirty out of 1,000 homes (well above the national average of thirteen of every 1,000 homes).3 Today, it is reported that nearly forty-six percent of homes in Richmond are “underwater,” meaning that what is owed on the mortgage is more than the current value of the property.4 Seeking to put an end to the foreclosures, the City of Richmond announced a plan on July 30, 2013 to use the power of eminent domain to buy underwater mortgages from lenders.5 The city plans to buy the mortgages for eighty percent of a home’s current value, a price they believe is high enough to amount to the just compensation that is required by the Fifth Amendment’s protection against the taking of private property.6 Richmond would then convert the acquired mortgages into FHA loans with smaller principals that correspond with the current value of the home.7 FHA loans are insured against default by the Federal Housing Authority (a section of the United States Department of Housing Development) and are issued by private, FHA-approved lenders. On August 7, 2013, several banks representing the bond investors that owned these underwater mortgages filed suit against the city, challenging the plan’s constitutionality. Given the current state of eminent domain law, which allows for eminent domain to be exercised for the public purpose of economic development, some argue that Richmond’s plan passes constitutional scrutiny.8  However, this use pushes the boundaries of legitimate exercise of eminent domain, even under the majority opinion in Kelo v. City of New London, Conn, which confirmed that economic development is proper grounds for states to exercise eminent domain.9

Continue reading

Stopping Steubenville: Reducing Cases of Adolescent Sexual Assault Involving Alcohol

Alexandra Schiffrin*

3 U. Mich. J.L. Reform 10A (pdf)

While the Steubenville Rape Case1 garnered much attention for the role that social media played in initiating the prosecution and inciting national outrage, the underlying legal issue was the victim’s incapacity to consent because of self-induced intoxication.2 The case surrounded the August 12, 2012 sexual assault of an intoxicated sixteen-year-old girl by two high school football players, Trent Mays and Ma’lik Richmond, after a party in Steubenville, Ohio.3 Following the prominent coverage of the incident across social media channels and in the news, Mays and Richmond—who were charged with raping the sixteen-year-old girl—were often portrayed as the real victims; observers blamed the female victim for partying and putting herself in a position to be violated.4 Ultimately, the juvenile court held that the victim was so intoxicated that she was unable to give consent, finding Mays and Richmond guilty of rape. Judge Thomas Lipps, who presided over the trial, warned that the young men’s behavior was a “cautionary lesson” in how adolescents conduct themselves in the presence of alcohol.5

Continue reading

If All Other Options Fail: The Plight of Wild Horses and the Dubious Case for Horse Slaughtering

Brendan Vandor*

3 U. Mich. J.L. Reform 1A (pdf)

Robert Redford recently joined forces with former presidential candidate Bill Richardson to stop the return of horse slaughtering to the United States.  Few among us would bet against that duo in their fight for a cause that appears on its face to be unassailably just. Yet, horse slaughtering is a highly complex issue that boasts its fair share of credible supporters, and the activity is poised for a revival after a six-year ban if Redford, Richardson, and various animal rights groups do not win a recently-brought federal lawsuit.  This Comment recommends a multi-pronged approach to solving the problem of wild horse overpopulation—the most commonly-raised justification for horse slaughter—but also supports a highly regulated return of slaughter if the wild horse crisis proves to be unsolvable by less bloody means.

Continue reading