You have seen those pictures on TV lately of the foreclosure sales on the courthouse steps. The increase in foreclosures is one of the reasons for the mortgage bailout plan now the law of the land. For now we will ignore the sordid politics of the situation and talk only about the legality of the program. Real estate law is contolled by State law. That is why in some States you have mortgages and in others you have a deed of trust to support a lien against a house. As a practical matter they are the same. In each instance there is a lending that results in a note and that note to the homebuyer is burdened with a lien against the house. That lien is in the form of a mortgage or deed of trust. The laws vary quite a bit across the nation but usually it is in the States that use the mortgage system where the lender has to go to Court when there is a default on the note to enforce the mortgage and be allowed to foreclose by Court order. In most of the States that utilize the deed of trust method for foreclosing it is not necessary to go to Court for any order. Under the deed of trust a trustee has already been appointed and he is charged with the duty to foreclose on the lien when there is default on behalf of the lender. That is his fiduciary duty as trustee. The point here is that in either case it is the utilization of state laws that are implemented to protect the owner and payor of the note and to protect the interest of the lender under the lien document whether mortgage or deed of trust. There is NO Federal law regarding real estate rights and ownership and enforcing the rights in real estate. Those laws are strictly State. Protecting your lien rights or rights of ownership are enforced by State courts, not federal courts. No one goes to the Federal court to enforce lien rights.
There is a long history of enforcement of the equal protection of the laws by States as set out in the 14th amendment. All citizens are entitled to the equal protection of the laws. Since the Feds have selected who will receive aid regarding their defaulted mortgage and not applied that assistance equall among all citizens I believe a strong case can be made that the Federal mandate in forcing the States to deny equal protection to all its citizens. The Feds have the right to spend their money however they want but remember the actually enforcement of the re-worked mortgage under the bailout program would come in State court. Again there is no Federal law regarding real estate rights and interests. If some mortgage security holder felt his right to foreclose had been thwarted he would go to State court. It would be a State court that would rule his mortgage was now changed and he couldn’t foreclose. Likewise those that don’t qualify for the mortgage bailout are being denied the equal protection of the law. They are being discriminated against under State law (which controls their rights to their house) due to their economic condition. If we are helping folks with their mortgages it should be uniform, not selective. Some of getting special protections under the law of the State by Federal mandate and will not face a foreclosure under State law while their neighbor down the street will be facing forclosure only because of the Federal discrimination that is being enforced by the State courts. It will be the State courts that deal with those mortgage disputes, not Federal courts. There is ample case law to support the notion that any action or even inaction by any agency of a State must comply with the equal protection amendment.
How does the Government justify the unequal treatment of the citizens in the program adopted? Make for interesting court room drama. You don’t have to be a legal scholar, common sense gives the answer. The treatment is not equal. The enforcement of the real estate laws the States will be required to implement will not be equal. Again there is ample legal authority that requires the State courts to enforce law that has been pre-empted by the Federal Government. Think it over.
We all know that a light year is the distance that light can travel in one year. It is a function of time and distance. We can’t really know the boundaries of the universe because there may be stars or planets beyond our light horizon. There could be objects that are so distant that even traveling at light speed they simply have not had sufficient time to arrive at Earth. So how much is out there we may not know about?