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34 Cardozo L. Rev. 1889 (2012-2013)
ADR's Place in Foreclosure: Remedying the Flaws of a Securitized Housing Market

handle is hein.journals/cdozo34 and id is 2015 raw text is: ADR's PLACE IN FORECLOSURE: REMEDYING THE FLAWS OF A SECURITIZED HOUSING MARKET Lydia Nussbaumt Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower- lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid foreclosures than others. This Article comprehensively examines the key components of foreclosure ADR programs and presents best practices for governments seeking to utilize ADR as a tool to mitigate the foreclosure crisis and re-energize the economy. TABLE OF CONTENTS IN TRO D U CTIO N .............................................................................................................. 1890 1. INADEQUACY OF CONVENTIONAL FORECLOSURE PROCEDURES ........................ 1893 A. Conventional Foreclosure Procedure ....................................................... 1893 B. Foreclosure in Securitized Framework ..................................................... 1896 C. Problems with Securitized Loan Servicing ............................................... 1898 1. Loan Servicer Preference for Foreclosure .................................. 1899 2. Communication Failures Between Borrowers and Loan Servicers .......................................................................................... 19 0 1 t Associate Professor and Associate Director of the Saltman Center for Conflict Resolution, University of Nevada, Las Vegas, William S. Boyd School of Law. I wish to thank my colleagues Michele Gilman, Leigh Goodmark, Jaime Lee, Jane Murphy, and Rob Rubinson for their guidance and comments on earlier drafts of this Article and Kate Titford for her critique and insights. The inspiration and ideas for this piece came from assisting homeowners through Maryland's Foreclosure Prevention Initiative. 1889

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