Category Archives: Law

UPDATE IV: Forclosure Fracas (Still About Deadbeats)

Business, Debt, Federal Reserve Bank, Law, libertarianism, Private Property, Reason

Vox Day, friend and fellow (libertarian) rebel on WND.COM, has objected to my comments about his bank foreclosure comments in the BAB post titled “Financial Paperwork Crisis (No Conspiracy Thinking, Please).” Vox and I have been exchanging emails on the topic. Vox traces the arguments back-and-forth in his post “A dialogue with Ilana (UPDATED).”

Consider: You’re a homeowners. You have a mortgage with the bank. The title deed is yours; you have a legal right or title to the property. However, this obtains just as long as you honor your mortgage payments. The bank has a lien on the property until you pay-up the mortgage. If you pay your monthly mortgage installments, and the bank has cashed these payments, your bank account will reflect that. If you’ve met these conditions, and the bank, nevertheless, proceeds to foreclose on you—this is an error, and a legal and statistical anomaly; an outlier case.

It is my understanding that Vox refutes the above; says the latter scenario may be the norm, or could easily become the norm due to endemic fraud.

Distilled, I contend that it is almost always true that a necessary condition for a foreclosure is for the homeowner to have failed to make his mortgage payments. It is my understanding that Vox disputes this.

I told Vox that the one article he referred me to “began with a one-case study as its proof. This is statistically worse than insignificant. The article graduated to assertion. Then added another one-case study.” Vox may well be right, “but the data in the column he provided do not prove his case.

I have since Googled some of the terms Vox deploys in his post. One search led me to the Washington Post’s Ezra Klein. When Ezra does get something right it is only by accident. In any event, the Klein article does not support the Day case (as I understood it), namely that the foreclosed upon are being treated unjustly, even routinely robbed of their property.

Understand: I have no dog in the fracas other than the truth; am quite ready to find for Vox. So far, the hard evidence is missing.

Our debate might be delayed for a while, but it will continue. Stay tuned.

UPDATED I (Oct. 18): Difster’s comment hereunder is mostly waffle unless he is able to address what I wrote in the post: has the homeowner being foreclosed upon been paying his debt or not. He can’t. I really can’t abide argument that doesn’t cleave to reality and evidence. Bring me evidence of all the cases of paid-up homeowners who’ve been foreclosed upon. Present that here, please.

UPDATE II: Judging from this tale of woe, the lawyers for the defaulting borrower are themselves using what they consider irregularities of procedure to try and get their delinquent client’s debt forgiven. I am not saying that “MERS, the electronic mortgage tracking system,” and the banks that use it, are following the letter of the law, but what people seem to be skirting here, much to my horror, is that these borrowers owe money they borrowed. You don’t forgive someone’s debt because the debt-holder’s bureaucracy is bad, or even dubious. And you don’t accuse bankers as a group of robbing home owners of title to their homes, because of problems of paper trail. (As I pointed out here, to argue against the bankers, in this case, on the ground that they are, moreover, embroiled in the fractional reserve system is to make an error of logic, maybe even a categorical error. Along the lines of releasing murderers because justice system is corrupt, etc.)

Note too that nowhere do the delinquent borrowers deny that they have not paid their debts, only that they are struggling “to figure out who owns their loans, who can negotiate loan modifications with them, or even how to get a call returned.”

Also: Borrowers are deploying the very argument the bankers are using: it’s the bureaucracy.

What do you know, it seems that, as outlined in this BAB post, “the latest foreclosure crisis is indeed bureaucratic in nature.”

UPDATE III: The thing to take away from Vox’s WND column today is this line: “the law is very clear on the matter: ‘If the chain of title is broken, then the borrower’s loan is no longer secured by the property.'”

This is the positive law. The fact of the borrower’s debt is unchanged. A took from B in order to buy C. That’s another “chain” to keep in mind.

UPDATE IV (Oct. 19): STILL ABOUT DEADBEATS. From all the reports so far, FBN’s Gerri Willis’ being the latest, it is as I said. The defaulters owe boatloads of money. The bankers bungled the paper work in a manner that verges on the criminal. The reality, in as much as property rights go, comports with my distillation on this post and the one linked to it, “Financial Paperwork Crisis (No Conspiracy Thinking, Please).”

UPDATED: Healthcare Under The Hammer

Government, Healthcare, Law, Regulation, The State

The judicial, legislative, and executive are in an unholy alliance that has long since sundered the 10th Amendment, namely constitutional individual and states’ rights. As we wait on the tyrannical federal trinity to issue decrees in response to the challenge to Obamacare launched by “20 different lawsuits with 21 different states as plaintiffs,” TIMES-DISPATCH COLUMNIST A. BARTON HINKLE provides valuable background analysis.

How Will the Court Rule in Mandate Case?
By A. BARTON HINKLE

Predicting how the Supreme Court will rule in a given case is often a sketchy business. The court doesn’t break down neatly along liberal/conservative, or big-government/small-government, lines. For every Heller or Citizens United infuriating the left, there’s a Kelo or Raich to send steam billowing out of conservatives’ ears.

So there’s no telling how the Supremes might come down on the question of whether Obamacare’s individual mandate is constitutional. Now that a federal judge has refused to dismiss Attorney General Ken Cuccinelli’s suit against it, proponents of the Patient Protection and Affordable Care Act will have to argue the case on the merits.
That might not be as easy as some have assumed. This becomes clear from an amicus brief submitted by Ilya Somin — a law professor at George Mason — along with the Washington Legal Foundation and assorted other law profs from around the country.

Somin notes that, as Madison said, the Constitution does not grant Congress “an indefinite supremacy over all persons and things.” Rather, it lists a finite set of federal powers — and forcing people to buy consumer goods is not one of them.

True, the federal government does many other things the Constitution does not explicitly mention, and the power to do them is taken to be implied. So proponents of the individual mandate hang their hat on a couple of different hooks.

One is the Commerce Clause, granting a congressional power to regulate interstate commerce. The Supreme Court has broken down the Commerce Clause into three parts: regulating the channels of interstate commerce, the instrumentalities of commerce, and the “activities” that “substantially affect” interstate commerce. But, Somin writes, “an individual’s mere status as uninsured is neither an instrumentality of interstate commerce, such as a road or airport, nor . . . is being uninsured a person or thing that travels in interstate commerce.” And it is absurd to claim that inactivity constitutes activity.

To see why, Somin goes back to the decision in Gonzales v. Raich, in which the court ruled that growing marijuana for personal medical use — an activity that is neither commerce nor interstate — could be forbidden under the Interstate Commerce Clause. The Supreme Court ruled that Congress had broad authority under the clause to regulate even “noneconomic activity.”

But unlike growing marijuana, not purchasing health insurance is not even an activity, and it is fatuous to pretend otherwise. The Commerce Clause gives Congress the power to regulate transactions between Jim and Bob. It doesn’t give Congress the power to force Fred, who had been resting under a tree, to join Jim and Bob’s exchange.

If Congress has the power to do that, Somin writes, then “the federal government would have the power to force citizens to engage in any activity that might conceivably affect commerce is some way.” Big-government liberals might be perfectly fine with that. But, Somin says, “this is precisely the kind of unconstrained power that the court has expressly rejected.”

At this point, Obamacare advocates usually interrupt with the emergency-room argument. It goes like this: “Well, people who don’t have insurance end up needing medical care, and hospitals are required by law to treat them, and that imposes costs on everybody else. What are you going to do — let hospitals throw patients into the street?”

This is a fine rhetorical device and an interesting ethical question, despite some factual weaknesses (not everybody requires medical care they can’t pay for out of pocket; millions of healthy young adults don’t need insurance). But it is not a constitutional argument. A hospital’s legal obligations don’t confer powers on Congress. Banks have lending obligations. That doesn’t mean Congress can force you to open a checking account.

On Thursday, a federal judge in Michigan tested another argument: The failure to buy insurance qualifies activity because “by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for health care services later.” The same reasoning, however, would deny conscientious objectors the right to avoid military service, because by choosing to forgo participation in a war, they are forcing someone else to go in their place.

The amicus brief makes quick work of the notion that the penalty for not buying insurance is a tax. It’s not an income tax, it’s not an excise tax, so it must be a direct tax — which must be apportioned among the states — or, as seems patently obvious, it’s a penalty. But Congress can’t impose a penalty to enforce regulation of something it has no authority to regulate in the first place.
Finally, the mandate’s proponents say it’s authorized by the Necessary and Proper Clause, because it’s necessary to impose the requirement that insurance companies accept all comers regardless of pre-existing conditions. (Why? Because without the mandate, people wouldn’t buy insurance until they got sick.) This might be the strongest argument for the mandate. But it still faces a couple of problems.

First, the individual mandate tries to achieve something by taking an extremely broad step when a more narrowly tailored one would suffice. As Paul Starr wrote in the liberal American Prospect last year, Congress could address the adverse-selection problem by giving individuals “a right to opt out of the mandate if they signed a form agreeing that they could not opt in for the following five years . . . .For five years they would become ineligible for federal subsidies for health insurance and, if they did buy coverage, no insurer would have to cover a pre-existing condition of theirs.” Strictly speaking, the mandate is not necessary.

Second, if the court concludes that the mandate is justified because it is, after all, “rationally related” to insurancee regulation, then the justices would open the door (as they did in Kelo) to governmental sophistry: As long as legislators claim a new power being sought has some tenuous connection to an existing power, then the courts can never say no. This would allow lawmakers to assume an indefinite supremacy over persons and things, by stacking new powers one atop the other.

Liberals are in love with granting Washington indefinite supremacy right now, with a Democratic Congress and president at the helm. They might not like it so much should a Republican Congress start working hand-in-glove with a President Sarah Palin.

UPDATE: Good news. A “Federal Judge Allows Multi-State Suit Against Health Care Law to Proceed.”

Certain Economic Decisions Are ‘Constitutionally’ Compulsory

Conspiracy, Healthcare, Law, Regulation

As the late Joe Sobran once quipped, “The U.S. Constitution poses no serious threat to our form of government.” A Clinton-appointed U.S. District Court by the name of Judge George Steeh has ruled that “Congress can require individuals to buy health insurance starting in 2014 as one of the provisions of health care reform legislation enacted in March.” The ‘judge’ went on to dismiss ‘part of the Ann Arbor-based Thomas More Law Center’s federal lawsuit.'”

The nonprofit Christian legal advocacy group filed a lawsuit on behalf of four uninsured Michigan residents who objected to the individual mandate provisions in the Patient Protection and Affordable Care Act as an unconstitutional tax.

According to the Law Center, the court took the extraordinary step of concluding that Congress’ Commerce Clause power does not end at regulating economic activity. Rather, this power can be extended to regulate economic decisions whether made consciously or not. The court stated, ‘While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.'”

Rob Muise, The Law Center’s senior trial counsel who handled the case commented, ‘This decision is ripe for appeal, which we intend to do expeditiously.'”

Certain Economic Decisions Are 'Constitutionally' Compulsory

Conspiracy, Healthcare, Law, Regulation

As the late Joe Sobran once quipped, “The U.S. Constitution poses no serious threat to our form of government.” A Clinton-appointed U.S. District Court by the name of Judge George Steeh has ruled that “Congress can require individuals to buy health insurance starting in 2014 as one of the provisions of health care reform legislation enacted in March.” The ‘judge’ went on to dismiss ‘part of the Ann Arbor-based Thomas More Law Center’s federal lawsuit.'”

The nonprofit Christian legal advocacy group filed a lawsuit on behalf of four uninsured Michigan residents who objected to the individual mandate provisions in the Patient Protection and Affordable Care Act as an unconstitutional tax.

According to the Law Center, the court took the extraordinary step of concluding that Congress’ Commerce Clause power does not end at regulating economic activity. Rather, this power can be extended to regulate economic decisions whether made consciously or not. The court stated, ‘While plaintiffs describe the Commerce Clause power as reaching economic activity, the government’s characterization of the Commerce Clause reaching economic decisions is more accurate.'”

Rob Muise, The Law Center’s senior trial counsel who handled the case commented, ‘This decision is ripe for appeal, which we intend to do expeditiously.'”