There are no prerequisites, but related courses that would be helpful to take first, at the same time, or later include Bankruptcy, Secured Transactions, Real Estate Transactions, Business Organizations, and Corporate Finance. The preferred sequence is to take Bankruptcy or Secured Transactions (or both), the Mortgage Crisis, and then the Mortgage Clinic. To take the clinic, students must take the Mortgage Crisis first or concurrently.
This course will bring together law students and the Arizona bench and bar to discuss solutions to the mortgage crisis. The emphasis will be on practice-oriented knowledge and problem-solving. Many class sessions will be available for continuing legal education credit to lawyers in the community, with panels of expert attorneys presenting on the issues and both law students and lawyers joining in the discussion. Students will learn about the role of notes and deeds of trusts under Arizona law, the structure of mortgage securitizations put together on Wall Street, public and private mortgage modification programs, the use of bankruptcy to save homes, and changes in mortgage transactions in the wake of the crisis.
The reading will be varied and include examination of legal documents such as mortgage notes, deeds of trust, mortgage servicers’ pooling and servicing agreements, complaints in pending litigation, bankruptcy schedules, and model intake and interview templates. Students will learn to conduct probing interviews of clients about their financial affairs and to negotiate with creditors for modifications. They will research and write papers on current legal issues in the ongoing crisis and be graded on the basis of written assignments and class participation.
This course is funded by a grant from the Office of the Arizona Attorney General to prepare law students and lawyers to provide representation to Arizona borrowers who are at risk of mortgage default or foreclosure or who have been victimized by predatory lending or mortgage repair scams. The course is part of a sequence in which students will also be eligible to work directly with borrowers in Mortgage Clinic placements at Southern Arizona Legal Aid and perhaps other agencies. The Mortgage Crisis course is available to students who do not also take the Mortgage Clinic, but the crisis course is required in order to take the clinic.
The Mortgage Crisis course is appropriate for students interested in business law generally. It will expose students to how creditors’ and investors’ lawyers protect the interests of their clients (or sometimes fail to do so) when they structure transactions and invoke remedies after default and to the effects on borrowers, as well as the defenses and remedies available to them. The class will provide opportunities for law students and lawyers to discuss together the full range of legal and policy issues involved in the mortgage crisis, with an emphasis on practical solutions. The creditor/investor perspective is a key part of finding solutions to the mortgage crisis, both on the individual level (when negotiated solutions may be desirable) and system-wide (to overcome reluctance that slows relief efforts). Mortgage finance has become extremely complex, with the use of securitization to increase access to home loans by raising capital from investors who take differentiated interests in mortgage pools. In order to provide good representation to borrowers or to creditors and investors, lawyers need to understand securitization and the flaws in the process in recent years. Students also will have an opportunity to learn how mortgage finance has already changed in response to the crisis.
Most class sessions will involve guest presentations by practicing lawyers who are experts in the field, including lawyers who have represented the various key types of players.
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Graded on the basis of class preparation and written assignments (but not an exam). The class will produce a bank of materials on a range of mortgage issues that students in the Mortgage Clinic are likely to encounter. All students will prepare at least two written assignments over the course of the semester.