Posted by: Ray Brescia | December 22, 2014

Vote Now for the Free Virtual Foreclosure Guide for an ABA Award

The Virtual Foreclosure Guide helps low- and moderate-income homeowners facing foreclosure access easy-to-use legal information to help them navigate the foreclosure process, even if they can’t afford and don’t have an attorney to help them.  The Virtual Foreclosure Guide has now been nominated for the Louis M. Brown Award from the American Bar Association and we need your help to support its candidacy for the award.

You can vote here.  It takes literally 5 seconds.

What’s the Louis M. Brown award you ask?  Here’s a description.

The Louis M. Brown Award for legal access honors programs and projects dedicated to matching the unmet legal needs of the middle class and those of moderate incomes with lawyers who provide affordable legal information, services and representation.

I would like to think that our Virtual Foreclosure Guide hits all the right notes.  It is dedicated to helping to support middle class homeowners who cannot otherwise find an attorney to represent them, and it does so free of charge.  We are also finding that individuals who have an attorney or legal counselor are also accessing our site, like they might something like WebMD, even if they have representation.  Lawyers and housing counselors are also accessing the site and referring those they can’t help to it.  Hundreds of homeowners have already logged onto the site in just three months since it went live.

A joint project between the Empire Justice Center, the University at Albany, and Albany Law School, completed exclusively through in-kind contributions and countless hours of college, law student, faculty and volunteer time, those of us who created the app believe it embodies the spirit of the Louis M. Brown award.  We hope you agree and will vote for the app for the award.

To learn more about the Guide, you can read about it here and here.

Thanks for taking the time to support our work.

If we are to believe the hype about companies like LegalZoom and Nolo, entities that are providing low-cost services that look a lot like lawyering, the legal profession is in the midst of a disruption: a monumental, transformative shift in shape and focus that will change the practice of law forever.  Harvard’s Clayton Christensen has coined the term the “Innovator’s Dilemma” for the phenomenon of business disruption through which high-end producers of goods and services are “disrupted” by those entering the market on the lower end.  At first, incumbent companies ignore the new entrants until it is too late: when those insurgents slowly develop market share from the bottom up and displace the incumbents.  One example of this is the downfall of Blockbuster at the hands of Netflix.

Much of the focus of the impact of these disruptive companies is on their potential ramifications for Big Law: the large firms that serve the high end of the market for legal services.  But if Christensen’s theory of business disruption is to be believed, true disruption of the legal services industry is likely to come from those serving the “lower end” of the market: the solo practitioners, legal services lawyers, and “low bono” providers of legal services.  It is innovation in these corners of the market where path breaking disruption will take place, mostly out of necessity.  What’s more, it is the low end of the market that is actually quite robust: i.e., there is a desperate need for legal services, just an inability to pay for them.

In a recent article I co-authored with several of my students, Embracing Disruption: How Technological Change in the Delivery of Legal Services Can Improve Access to Justice, which is forthcoming in the Albany Law Review, we look at the ways that disruptive innovation in the legal market can expand the reach of legal assistance to the many who presently do not have access to a lawyer: the eighty percent of low-income consumers and fifty percent of middle-income consumers who face their legal problem without legal assistance.  Given the need in low- and moderate-income communities for affordable legal services, perhaps disruption in this market has its benefits: at a minimum, it offers a way to improve access to justice for communities and individuals under served by the present—and expensive—modes of delivering legal services in the United States.  This article explores those benefits, but also highlights some of the concerns that arise when technology is used to improve access to justice.

Posted by: Ray Brescia | September 23, 2014

The Price of Crisis

This week, my co-author and I, Nick Martin, released a new paper: The Price of Crisis: Eminent Domain, Local Governments, and the Value of Underwater Mortgages, forthcoming in the Temple Civil & Political Rights Law Review.  In it, me make several claims.  First, litigation, (often just the mere threat of litigation) has done more, to date, to remedy the problem of underwater mortgages than any other legal strategy.  Second, local governments have played a role in using such tactics.  Third, eminent domain is akin to such tactics, and even the threat of using eminent domain might be enough to bring banks to the table to reduce principal balances on underwater mortgages.  Finally, we discuss the going price for distressed mortgages on the current market: sixty cents on the dollar.  We argue that, if localities were to seize underwater mortgages through eminent domain, this should be the price, roughly, that they would have to pay to compensate mortgage holders for the taking.  The paper is available for download here.

This week, the Empire Justice Center released a new web-based application to help homeowners facing foreclosure.  It takes an “analog” foreclosure guide previously prepared by Empire Justice and creates a digitial, interactive version of it.  I had the good fortune of working with Empire Justice, students and faculty at the University at Albany’s College of Information and Computing, Albany Law students, homeowners and legal services practitioners to bring the project to fruition.  Through it, homeowners in arrears in their mortgages and facing foreclosure, who may not have access to a lawyer, will have free, step-by-step guidance, fillable documents, and other forms of information that can help them navigate the foreclosure process, and, hopefully, avoid losing their homes.  This application is just the beginning of what I hope will be an ongoing partnership to develop these sorts of programs that can help expand access to justice and get critical information and guidance into the hands of low- and moderate-income consumers.  View the application here, and the press release about the launch here.

Posted by: Ray Brescia | August 25, 2014

Ready to Learn, Beyond the Black Letter of the Law

In my recent op-ed for the National Law Journal, I discuss the need for upper-level classes in law school that afford students a chance to learn the art of the legal profession, and not just the tools of the trade.  Read: As School Year Begins, Think Outside the Tort.


Posted by: Ray Brescia | August 5, 2014

Standard and Poor’s: Inequality’s Newest Opponent

The latest salvo in the inequality wars comes from an unlikely source: the credit rating agency Standard and Poor’s.  In a recent report, S&P’s researchers warn that economic inequality in the United States threatens to dampen economic growth.  Some of their key findings include the following:

  • At extreme levels, income inequality can harm sustained economic growth over long periods. The U.S. is approaching that threshold.

  • Standard & Poor’s sees extreme income inequality as a drag on long-run economic growth. We’ve reduced our 10-year U.S. growth forecast to a 2.5% rate. We expected 2.8% five years ago.

  • With wages of a college graduate double that of a high school graduate, increasing educational attainment is an effective way to bring income inequality back to healthy levels.

  • It also helps the U.S economy. Over the next five years, if the American workforce completed just one more year of school, the resulting productivity gains could add about $525 billion, or 2.4%, to the level of GDP, relative to the baseline.

They also express concern that “extreme policy measures,” like dramatic increases in taxes on the wealthy, could “backfire” and not produce favorable outcomes.

Others have drawn this connection between economic growth and economic inequality.  John Kenneth Galbraith saw this connection, and considered it one of the chief causes of the Great Depression.  Why inequality is troublesome and could lead to economic recession or worse is that wealthy individuals tend to spend less of their wealth on consumer goods.  When a greater percentage of income is absorbed by a smaller number of the wealthy, less of that money goes back into the economy in ways that spur consumption of consumer goods.   Conversely, when lower- and middle-income people have more income to spend–like through such mechanisms as increases in the minimum wage–they tend to spend more of their income and wealth on consumer goods, strengthening consumption, demand and economic activity.

Perhaps the Standard and Poor’s report will wake up some who, to date, have been unwilling to listen to liberal, anti-inequality economists like Paul Krugman and Thomas Piketty.  When even your friends turn on you, it might be time to rethink long-held beliefs.

Posted by: Ray Brescia | July 22, 2014

The Sharing Economy’s Take on Trust

This year’s World Cup, in addition to exhibiting many extremely tight games, and one extremely embarrassing blowout, was a showcase for the growth of the “sharing economy”: peer-to-peer, web-based platforms that allow individuals to sell products and services to others.  Through just one of these sharing economy platforms, airbnb, a pioneer in the sharing economy, roughly 120,000 people rented rooms in homes in Brazil to watch the games.

The key hurdle for any sharing economy hub is its ability to develop trust between sellers and prospective consumers.   According to Nobel-prize winning economist Kenneth Arrow, “[v]irtually every commercial transaction has within itself an element of trust.”  Few transactions exhibit the importance of trust like those that take place in the sharing economy.  Outside most systems of regulatory oversight, these transactions function almost exclusively on trust.  Indeed, renting of rooms, lending out cars, accepting a ride in a car with a stranger, which are all effectively beyond the watchful eye of government: these are transactions that require trust.  And the sharing economy is finding ways to develop this trust among its participants.

In order to create this trust, these sharing economy platforms are looking to replicate the “reputation markets” of small towns that help keep predatory conduct in check. In such close-knit environments, individuals who trust each other, who can engage in face-to-face communications, and who often have personal experiences with businesses in the community, can share information about such businesses.  Car service companies like Lyft and Uber are using this type of peer-to-peer communication to create an average score for their drivers.  This score is generated by users after they complete a ride.  If a driver falls below a certain average score, he or she is no longer able to accept rides through the platform. Some platforms are taking similar steps—like asking customers and providers to link their respective Facebook pages—to give participants a window into the lives of their prospective business partners.

One company, Relay Ride, a car sharing platform, is attempting to replicate that reputation market by taking face-to-face communication one step farther.  Relay Ride has learned how to bring users and producers together so that they can create a personal connection before engaging in economic relations.  The company’s CEO Andre Haddad, quoted in a recent article in Wired Magazine, explains how Relay Ride learned how to create a bond between those who are lending out their cars and those who would borrow them: they had them meet face-to-face.  According to Haddad, “[t]hey really liked that human connection.”  Face-to-face interactions such as these help to lower social distance and create trust.  “People strike up a conversation and realize they have something in common, which boosts trust and makes people feel accountable,” says Haddad.  “They are going to have to return this car to that person and look them in the eye.”

Even in a global economy, trust is still central to economic exchange.  Platforms in the sharing economy are looking for ways to embed trust within their networks of producers and consumers.  These systems are not perfect, and predatory conduct still exists, but the expansion of the sharing economy will depend on its ability to replicate that small town reputation market on a global scale.  The success of the market in doing so to date bodes well for its continued growth as well as the exploration of new markets and sectors where sharing can occur in effective and mutually beneficial ways.

Posted by: Ray Brescia | July 8, 2014

Do Democrats Agree on Tactics for Addressing Inequality?

Matt Yglesias’s new post on Vox suggests that Democratic leaders agree on strategies for combating inequality, but argues also that disagreement does exist over whether to promote an anti-inequality message.  Yglesisas posits that Democratic leaders don’t all agree that an “inequality agenda,” like the one President Obama touted last year, is really something the party should get behind.  While he may be right that Democratic Party  politicians don’t agree that inequality should be at the center of the party’s message, I’m not so sure all Democratic party leaders agree on the range of tactics that could be deployed to combat economic inequality.  Raising the minimum wage?  Repealing the carried interest tax loophole?  Overturning Citizens United through a constitutional amendment?  While Democratic voters probably support all of these measures, would one find unanimity on all of these issues among elected officials in the Democratic Party, either at the federal level, or in the executive mansions and state houses across the country, where some of these tactics–like increases to state minimum wage laws–could be deployed, and in which any constitutional amendment would have to pass?  I’m not so sure.  There may still be some fissures on the substance after all.   There’s certainly lots of agreement, to be sure, but the inability of Democratic elected officials to fully embrace some of these items at the federal and state levels may reflect more than just a failure to get on the same page in terms of messaging.  Untangling the inequality knot will not be easy, and will require bold tactics and an aggressive strategy.  Getting agreement on such tactics among Democrats would appear to be one essential step towards reducing income inequality.  Then the inequality agenda can move on to recruiting Republicans.

As I wrote about in a post in the National Law Journal several months ago, in which I discussed Turkey’s attempt to ban twitter, there is a deep connection between social movements, technology and social change.

The iconic date of July 4, 1776, does not honor the day the Declaration of Independence was signed.  Nor does it memorialize the day it was read publicly.  It refers to the date the Continental Congress approved the final version of the document and sent it to the Philadelphia printer John Dunlop.

How awesome: A national holiday for pressing “send”!
Read more:

Posted by: Ray Brescia | June 28, 2014

Images of Misery: 43,634 Reasons Detroit Is in Trouble

The New York Times recently published a mosaic of images of the more than 40,000 properties in Detroit that have been in mortgage delinquency in recent months.  Here is the site’s description of these images.

This mosaic, created with images from Google Maps Street View, shows one of the many enormous challenges facing Detroit as it tries to climb out of debt. As of January, the owners of these properties collectively owed the county more than $328 million in unpaid taxes and fees. Since then, some have paid their debts, entered in payment plans or qualified for assistance. But 26,038 properties, shown with a yellow triangle, remain in jeopardy, and many are headed for public auction.

Tragic.  Staggering.  Heartbreaking.

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