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

[drwex]

I think it's a Federal matter in two respects: 1) insofar as we consider the ability to maintain one's home - even in the face of debt - as a necessary component of Life, Liberty, and the Pursuit...

Second, the Interstate Commerce Clause. The entities making the loans are operating across multiple state lines and in multiple separate jurisdictions. Therefore it seems appropriate for it to be Federally regulated.

We don't have a national murder law but when the crime crosses state lines the feds get involved.

[feste-sylvain.livejournal.com]

1) insofar as we consider the ability to maintain one's home - even in the face of debt - as a necessary component of Life, Liberty, and the Pursuit...

And as such, we are talking about the protection of the individual. But we are not talking about protection of the individual against the actions of the State, so it is not a Federal case.

Second, the Interstate Commerce Clause.

The most abused clause of the Constitution. At its inception, the Interstate Commerce Clause was supposed to keep the states from setting up inter-state tarriffs, and to facilitate free trade between the states. You are describing neither here.

California, for good demographical, geological and metereological reasons, has had tougher emissions standards for vehicles than other states. And yet it is mostly Michigan companies and Washington (state) based importers who bear the brunt of this. And yet the operation of these entities across state lines have had no problem dealing with the state law, nor have any successfully complained to the Feds that this state law was acting in restraint of trade. (Nor are they likely to, since it raises the barrier to any hopeful competitors.)

Likewise, Massachusetts is not the only state with "homestead" provisions in their lending laws, and the lenders have not been complaining about "restraint of trade" or even hardships there, either. (That I know of. Counter-examples grumblingly accepted.)

For yet another example, the next time you get one of those credit-card offers in the mail, check the back for the state-based set of conditions on the card. Financial instruments can deal with a plethora of diverse rules, and they don't call in the Feds to "clear things up".

[drwex]

we are not talking about protection of the individual against the actions of the State, so it is not a Federal case.

By that logic taking a kidnap victim across state lines shouldn't be a federal case. If you really think that then we're so far apart as not to have common discussion grounds. Do you really think that?

I'd agree that the ICC is widely abused (in part because it's overbroadly interpreted). But that doesn't explain why you think it doesn't permit the Feds to establish a baseline standard for homestead protection. States might enforce tougher standards (as CA does for vehicle emissions) but that doesn't say there can't be a Federal baseline.

Financial instruments can deal with a plethora of diverse rules, and they don't call in the Feds to "clear things up".

True, but not to the point, which is that we have a two-pronged crisis going on. Part 1 involves companies writing down billions in overvalued debt. Not a huge problem, except indirectly. Part 2 involves tens or maybe hundreds of thousands of people being tossed out of their homes. Problem, which 'financial instruments' aren't solving.

[feste-sylvain.livejournal.com]

By that logic taking a kidnap victim across state lines shouldn't be a federal case.

I dare say that the inter-state actions of criminals and the jurisdictional issues of extradition do not fall under the Interstate Commerce Clause.

But that doesn't explain why you think it doesn't permit the Feds to establish a baseline standard for homestead protection.

Again, jurisdiction. Who enforces this standard? In which court? To what end?

I have nothing in particular against state-level homestead acts, nor the motives that create them. I'm certain that some implementations are better than others. But I see no need for a Federal baseline, and I see real problems in the Feds enforcing one.