Posts Tagged ‘economic bubbles’

Economic Homicide, the Mortgage Interest Deduction and the Rule of Law: 2012’s Top Headlines

Wednesday, December 26th, 2012

Top 10Editor’s Note: As we head into 2013, I want to wish all of our readers a Happy New Year from everyone at Oppenheim Law. This has been our most successful year since the South Florida Law Blog was started in 2009. Our posts were seen by nearly 100,000 people, including our readers at Yahoo! Homes, where many of Roy Oppenheim’s blogs first appeared. For everyone who read or shared our content this year, a sincere thank you. Our mission is far from complete, and we look forward to sharing more commentary from the trenches in the New Year.

So without further adieu, here are the headlines that resonated with you over the past 12 months.

#10 — Obamacare, The Foreclosure Crisis and The Rule of Law

During the passing of the healthcare law, it seemed that the president assumed that the government had the ability to force people to buy a product from a private company that they did not necessarily want.

The mandate’s survival in the Supreme Court on a much narrower standard apparently leaves the question far from settled.

I felt that there was little, if any, constitutional analysis done by the president and his team when they decided to pass the mandate, except for the fact that they perceived a compelling need for it.

And that’s how the debate over the healthcare law reminded me of the legal debate during the foreclosure crisis.

Read the full blog here.

#9 — Mortgage Interest Deduction Will Be Capped, and That’s (Probably) a Good Thing

The fiscal cliff contains many, many moving parts, which sometimes tend to get lost in a sea of white noise. But behind all the political grandstanding and theatrics, there are real Main Street issues at play.
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Why The Housing Bubble Burst: Explaining Economic Homicide

Thursday, December 13th, 2012

Roy Oppenheim’s commentary was originally published on Yahoo! Homes and is being republished on South Florida Law Blog with their permission.

Housing BubbleIt is easy to call Wall Street a villain and lay the blame for the housing collapse at their doorstep, and I did just that in one of my recent blogs, where I likened the banks’ conduct during the housing collapse to “economic homicide.”

My Rabbi asked me to further explain the concept of foreseeability, a notion I touched on in the blog, as it relates back to the banks and the real estate bubble.

So allow me to explain, but first, please grant me a few more hyperboles.

If you pour gasoline on a fire, then you’d have to know that fire would accelerate. Otherwise people would think you are a fool.

Likewise as people often refer to the real estate market as a bubble, I like to think of the banks and their agents as people who filled that bubble with helium.

At some point they’d have to know it would burst. It was absolutely foreseeable. So how did they “fill the bubble?”

First, they completely disregarded underwriting guidelines. Bank of America, Wells Fargo, and most of the big banks took shortcuts, playing fast and loose with guidelines they once held sacred.

They signed off on these loans without considering their underwriting obligations, without checking whether the borrower was creditworthy, or even checking tax returns. More loans went out, and into the securitization machine, but of course the quality of those securitized trusts ended up resembling something your dog might leave behind on the sidewalk.
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