Why not a national homestead law?

[drwex]

A homestead law is a specific exemption (read about MA's homestead law) protecting a person or family's primary residence against seizure for debt repayment. Enacted properly a homestead law could protect peoples' basic shelter needs from things like subprime mortgage foreclosures while denying protection to real estate speculators, who generally don't live in the speculated properties. Several states have such laws to varying degrees (some protect the house as a whole; some protect property up to a fixed limit, etc). I haven't been able to find a reliable data source on how many states already have such laws and how many do not.

Isn't protecting homes that people actually live in and want to continue to maintain a desirable outcome? Why is nobody talking about a national homestead law? It wouldn't prevent people from having massive debts and possibly having to declare bankruptcy, but it would prevent them from losing their homes while they get their financial feet back under them.

I'm wondering if there's some obvious disadvantage that I'm missing (other than to creditors who can't seize and resell negative-equity houses; I'm not crying a lot of tears over this just this moment).

Comments

[ringrose.livejournal.com]

I could see this becoming a federal issue eventually simply because the credit agencies and banks are multi-state conglomerates. But my actual guess is that it hasn't come up because people don't know about it.

Credit agencies don't want more of it. People so deeply in debt that they need a homestead law don't have any clout to get one in place, because (regretfully) our current political environment is very money-driven.

I don't think it should be a federal issue, either. The different states have the right to choose different solutions to their problems. The place for federal laws is when the choices one state makes affect another.

[drwex]

See my reply to feste above. I think this is very much an interstate commerce matter.