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

[c1.livejournal.com]

When I consider the implications shielding debtors from creditors (don't think this won't be ripe for abuse) could have on the banking industry, and view that against the impact that the current subprime mortgage cirisis is having on the economy at large, I don't get the sense that it's as good an idea in practice that it is on paper.
I see people defaulting on their mortgages with far more reckless abandon because the negative consequences won't be as acute. (Homelessness is a pretty big motivator to pay your bills on time.)
I'm sure there's a better way that's not as ripe for abuse.