No Freedom Without Regulation This page intentionally left blank No Freedom Without Regulation The Hidden Lesson of the Subprime Crisis JOSEPH WILLIAM SINGER New Haven and London Copyright © 2015 by Joseph William Singer All rights reserved This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S Copyright Law and except by reviewers for the public press), without written permission from the publishers Yale University Press books may be purchased in quantity for educational, business, or promotional use For information, please e-mail sales.press@yale.edu (U.S office) or sales@yaleup.co.uk (U.K office) Designed by Sonia L Shannon Set in PMN Caecilia type by IDS Infotech, Ltd Printed in the United States of America Library of Congress Control Number: 2015930742 ISBN 978–0–300–21167–2 (cloth : alk paper) A catalogue record for this book is available from the British Library This paper meets the requirements of ANSI/NISO Z39.48–1992 (Permanence of Paper) 10 Where there is no Law, there is no Freedom —JOHN LOCKE This page intentionally left blank Contents The Subprime Challenge Why a Free and Democratic Society Needs Law 26 Why Consumer Protection Promotes the Free Market 58 Why Private Property Needs a Legal Infrastructure 95 Why Conservatives Like Regulation and Liberals Like Markets 157 Democratic Liberty 177 Notes 183 Acknowledgments 205 Index 209 This page intentionally left blank The Subprime Challenge All that makes existence valuable to anyone depends on the enforcement of restraints upon the actions of other people JOHN STUART MILL S herlock Holmes and Dr Watson go on a camping trip They set up their tent, have a modest repast, and go to sleep In the middle of the night, Holmes wakes Watson up and asks him, “What you see?” Watson looks up and sees the night sky and tells Holmes so “What does it mean?” Holmes asks Pondering this deep question, Watson answers, “It means the universe is vast and mysterious and our knowledge limited It means that we only understand what we can observe and that—” Holmes interrupts him “No, you idiot,” he says “It means someone has stolen our tent.”1 Things That We Have Taken for Granted Sometimes it is important to state the obvious, to confront truths so fundamental we have forgotten to see them The subprime crisis has forced us to remember things that we have Notes to Pages 147–149 foreclosure not available in Oregon unless all mortgage assignments are recorded) 73 MERS’s website misleadingly asserts that it does not “hide the mortgage note owner” because all MERS mortgages “are recorded in the public land records” while acknowledging that the purpose of the MERS system is to make it unnecessary for lenders to record mortgage assignments “Because MERS is a common agent for its members, recording an assignment of the mortgage is not necessary when ownership of the promissory note or servicing rights transfer between members.” http://www.mersinc.org/about-us/faq See also Christopher L Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U Cin L Rev 1359, 1400–1404 (2010) (noting the negative effect of MERS on public land title records) 74 Tanya Marsh, Foreclosures and the Failure of the American Title Recording System, 111 Colum L Rev Sidebar 19, 23 (2011) 75 Nolan Robinson, The Case Against Allowing Mortgage Electronic Registrations Systems, Inc (MERS) to Initiate Foreclosure Proceedings, 32 Cardozo L Rev 1621,1638 (2011) 76 Tanya Marsh, Foreclosures and the Failure of the American Title Recording System, 111 Colum L Rev Sidebar 19, 23 (2011) Complaint, Comm of Mass v Bank of America ¶ 150(b), Civ A No 11–4363 (Dec 1, 2011), http://www.mass.gov/ago/docs/press/ag-complaintnational-banks.pdf 77 Adam J Levitin & Tara Twomey, Mortgage Servicing, 28 Yale J on Regulation (2011) (analyzing servicer incentives) 78 Kathleen C Engel & Patricia A McCoy, The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps 131 (2011); 131; Alan M White, Losing the Paper—Mortgage Assignments, Note Transfers and Consumer Protection, 24 Loy Consumer L Rev 468, 496 (2012) 79 See, e.g., Abraham Bell & Gideon Parchomovsky, Reconfiguring Property in Three Dimensions, 75 U Chi L Rev 1015, 1022 (2008) (“There cannot be ownership in land without some clear idea of who owns the land, what land is owned, and what rights accrue to the owner as a result of her status.”); Steven J Eagle, Private Property, Development and Freedom: On Taking Our Own Advice, 59 SMU L Rev 345, 352 (2006) (“Individuals working to grow their assets must be supported by clear laws defining their property rights.”) 201 Notes to Pages 149–154 80 Henry E Smith, Exclusion v Governance: Two Strategies for Delineating Property Rights, 31 J Legal Stud 453 (2002); Henry E Smith, Property and Property Rules, 79 NYU L Rev 1719, 1797 (2004) (“Property rules have informational advantages”) 81 Henry E Smith, Property as the Law of Things, 125 Harv L Rev 1691, 1691, 1698, 1700–1713 (2012) 82 Joseph William Singer, The Rule of Reason in Property Law, 46 U.C Davis L Rev 1369 (2013) 83 Nolan Robinson, The Case Against Allowing Mortgage Electronic Registrations Systems, Inc (MERS) to Initiate Foreclosure Proceedings, 32 Cardozo L Rev 1621, 1635–1636 (2011); Alan M White, Losing the Paper—Mortgage Assignments, Note Transfers and Consumer Protection, 24 Loy Consumer L Rev 468, 494–496 (2012) 84 Mich Comp Laws § 600.3204(3); Timothy A Froehle, Standing in the Wake of the Foreclosure Crisis: Why Procedural Requirements Are Necessary to Prevent Further Loss to Homeowners, 96 Iowa L Rev 1719, 1740 (2011) (recommending adoption of this requirement by other states) 85 Laura A Steven, MERS and the Mortgage Crisis: Obfuscating Loan Ownership and the Need for Clarity, Brook J Corp Fin & Com L 251, 270 (2012) (arguing for federal legislation to require MERS to open its records to the public); Alan M White, Losing the Paper—Mortgage Assignments, Note Transfers and Consumer Protection, 24 Loy Consumer L Rev 468, 497 (2012) (advocating full disclosure of agency relationships and transfer history); Dustin A Zacks, Standing in Our Own Sunshine: Reconsidering Standing, Transparency, and Accuracy in Foreclosures, 29 Quinnipiac L Rev 551, 607–608 (2011) (arguing for greater public transparency in MERS records) Note that the Truth in Lending Act (TILA) was amended to require homeowners to be notified of changes in beneficial ownership of loans Dustin A Zacks, Standing in Our Own Sunshine: Reconsidering Standing, Transparency, and Accuracy in Foreclosures, 29 Quinnipiac L Rev 551, 593–594 (2011) (citing Helping Families Save Their Homes Act of 2009, Pub L No 111– 22, § 404, 123 Stat 1632, 1658 (2009); 15 U.S.C § 1641) 86 Alan M White, Losing the Paper—Mortgage Assignments, Note Transfers and Consumer Protection, 24 Loy Consumer L Rev 468, 497 (2012) 87 Dale A Whitman, Are We There Yet? The Case for a Uniform Electronic Recording Act, 24 W N Eng L Rev 245 (2002) 202 Notes to Pages 154–180 88 Dale A Whitman, A Proposal for a National Mortgage Registry: MERS Done Right, 78 Mo L Rev (2012) 89 Adam Levitin, The Paper Chase: Securitization, Foreclosure, and the Uncertainty of Mortgage Title, 63 Duke L J 637 (2013); Alan M White, Losing the Paper—Mortgage Assignments, Note Transfers and Consumer Protection, 24 Loy Consumer L Rev 468, 498 (2012) 90 Dustin A Zacks, Standing in Our Own Sunshine: Reconsidering Standing, Transparency, and Accuracy in Foreclosures, 29 Quinnipiac L Rev 551, 554 (2011) 91 Tanya Marsh, Foreclosures and the Failure of the American Title Recording System, 111 Colum L Rev Sidebar 19, 24–26 (2011) David Waks has similarly advocated for the creation of an independent federal agency to fulfill this role David Waks, Mortgage Electronic Registration Suspense: What’s Happening 32 (Feb 1, 2011), http://ssrn com/abstract=2197135 Why Conservatives Like Regulation and Liberals Like Markets Ringside Seat, American Prospect, Feb 25, 2013, http://www.eactivist.com/ea- campaign/action.handleViewInBrowser.do?ea campaigner.email=CqwWVGSGUygp%2F0B1KKe%2FDJdM2S90nP51 &broadcastId=24859&templateId=17542 See, e.g., Brian Barry, Why Social Justice Matters (2005) Democratic Liberty John Locke, The Second Treatise of Government ¶ 57, at 306 (Peter Laslett ed., 1988, Cambridge Univ Press, 2009 reprinting) (original 1690) (italics in original) Max Barry, Jennifer Government (2003) 203 This page intentionally left blank Acknowledgments Many people have made this book possible First to thank are the many scholars and lawyers I have conversed with over the years on these topics An inevitably incomplete list includes David Abromowitz, Greg Alexander, John Arnholz, Bethany Berger, Roger Bertling, Kevin Costello, David Dana, Nestor Davidson, Rashmi Dyal-Chand, Kathleen Engel, Kent Greenfield, David Grossman, Andy Kaufman, Adam Levitin, Jeremy McClane, Eduardo Peñalver, Jed Purdy, Sabeel Rahman, John Rattigan, John Savarese, Laura Underkuffler, André van der Walt, Johan van der Walt, Sjef van Erp, Rachael Walsh, Emma Waring, Max Weinstein, Alan White, and Dale Whitman Research for this book has been supported for many years by grants from Harvard Law School I would also like to thank the participants in the Progressive Property Conferences held at Harvard Law School in May 2012 and at Tulane Law School in May 2013 Parts of this book were presented in a different form at the Master Class following the Young Property Lawyers Forum at Stellenbosch University, South Africa, in October 2012, hosted by the South African Research Chair in Property Law, held by André van der Walt Aspects of this book were also presented at the University of Luxembourg in April 2013 and at a faculty workshop at U.C Davis School of Law in September 2013 The book in its present form also benefits from the feedback from the faculty of 205 Acknowledgments Boston College Law School at a faculty workshop in February 2014 I am very grateful to the participants of all these conferences and workshops for their helpful comments and suggestions Parts of this book previously appeared in an altered form in the following articles: Property as the Law of Democracy, 63 Duke L.J 1287 (2014) Foreclosure and the Failures of Formality, Or Subprime Mortgage Conundrums and How to Fix Them, 46 Conn L Rev 497 (2013) The Rule of Reason in Property Law, 46 U.C Davis L Rev 1369 (2013) Subprime: Why a Free and Democratic Society Needs Law, 47 Harv C.R.-C L L Rev 141 (2012) Property Law as the Infrastructure of Democracy [The Fourth in the Wolf Family Lecture Series on the American Law of Real Property], 11-1 Powell on Real Property (2011) The Anti-Apartheid Principle in American Property Law, Ala C.R.-C.L L Rev 83 (2011) Property Law and the Mortgage Crisis: Libertarian Fantasies and Subprime Realities, Prop L Rev (2011) Democratic Estates: Property Law in a Free and Democratic Society, 94 Cornell L Rev 1009 (2009) Corporate Responsibility in a Free and Democratic Society, 58 Case W Res L Rev 1031 (2008) 206 Acknowledgments Family members who took the time and care to give me their thoughts over the years were Martha Minow, Mira Singer, Lila Singer, and Newton Minow Without their love and support, I would not have been free to think, wonder, and work, and this book would never have seen the light of day 207 This page intentionally left blank Index adjustable rate mortgages, 78, 81, 136 adverse possession, 105–6, 110, 120 Affordable Care Act (“Obamacare”), alienability, 41, 43, 97, 112, 121; as core value, 149; feudal obstacles to, 38, 39–40; information essential to, 146, 147, 150, 152 anarchism, 3, antidiscrimination laws See civil rights laws antifeudalism, 44–51, 54, 68, 96, 99, 127, 162, 173, 175, 178 apartheid, 100, 101 aristocracy, 20 associational freedom, 48, 128 Boston, 116–18 building codes, 121, 162; advantages of, 66, 72; cost of, 75–76, 88; fairness of, 82; libertarian objections to, 63–64, 86 Burke, Edmund, 177 California, 104 Cantor, Eric, 184 n 12 Carteret, George, 36, 37 Carteret, Philip, 36, 37, 38, 55 caveat emptor, 60, 61, 65, 80, 173 Charles II, King of England, 36, 98 Charles River Bridge v Warren Bridge (1837), 110 civil forfeiture, 112 Civil Rights Act (1866), 102 civil rights laws, 46, 48–49, 50, 158, 162, 164, 188 n 41 Civil War, 45 Clean Air Act (1970), 70 Clean Water Act (1972), 70 coal mining, 70–71 common law, 34, 44, 74, 122–28 community property, 102–3 condominiums, 51–52, 99, 111, 121, 167 bankruptcy, 17, 113 Barry, Max, 180–81 Bartlett, Randall, 107–8 Battle of Hastings (1066), 32 behavioral economics, 90 Bentham, Jeremy, 15, 95 Berkeley, John, 36, 37, 38, 55 blight, 117, 119 Boaz, David, 185 n 20 Boehner, John, 184 n 12 border disputes, 105–6, 167 209 Index conservatism, 7, 9, 10; American ideology vs., 72–73; anarchism vs., 3; ascendance of, 11; eminent domain and, 118; markets idealized by, 90; new paradigm and, 11–15; perils of, 12, 17; redistribution and, 35–36, 44, 55–56, 101, 163; regulation compatible with, 21, 22, 69, 70, 95–96, 157, 161– 69, 177; rhetoric of, 68, 162 Constitution, 74; First Amendment, 45; Thirteenth Amendment, 45; Fourteenth Amendment, 102 Consumer Financial Protection Bureau (CFPB), 58–59, 80–81, 86 consumer protection, 77, 85, 126, 128, 167; free markets strengthened by, 20–21, 58–67, 69, 73, 92, 164–66, 169–70, 77–78; liberal support for, 11, 163; popular support for, 60–61, 66–67, 80, 92, 158, 166 contract, contracts, 123; ambiguous, 13; attentiveness obligation and, 128; breach of, 13, 46, 167; default terms in, 165, 192 n 21; enforcement of, 3, 12, 13; feudal, 35; freedom of, 13, 21, 48, 59, 60, 69, 74, 77, 80, 125–26, 149; good faith duty and, 126, 168; intricacies of, 4; mandatory terms in, 165; moral valence of, 126; prohibited, 28, 29, 35, 40, 43, 44, 46, 56; remedies and, 167; social, 27, 30 copyright, 17, 110 210 corporations, 16, 113 cost-benefit analysis, 74, 75 courts, 34–35, 103 covenants, 51, 53, 70, 102, 111, 121, 150 criminal forfeiture, 112 Cruz, Ted, Daniels, Mitch, 13, 157 debt, 46–47, 96 deception, 4, 20, 24, 60, 61, 69, 77–81, 93, 128, 167, 174 See also fraud Declaration of Independence, 45 deeds of trust, 103, 139 default, on government obligations, 3, 26 default terms, in contracts, 165, 192 n 21 democracy, 45; choosing framework for, 4; common understanding of, 159–60; constraints compatible with, 9–10; many owners of, 54–56; minimum standards imposed under, 19, 23–24, 68, 92; origins of, 28–29; property rights in, 96–97 democratic liberty, 18–25, 56–57, 160, 169 Demsetz, Harold, 31 De Peyster v Michael (1852), 39 deregulation, 14, 29, 35, 54, 67, 76, 115–16, 162, 170–71 Dickens, Charles, 71 Dienstbier, Jiri, 6, 58 disability, 46, 72, 112, 120, 167 disclaimability, 64, 66, 67 disclosure, 77 Index divorce, 103, 167 Dole, James, 97 Fair Housing Act (1968), 102 fair use, 110 family law, 17, 113 Federal Trade Commission Act (1914), 60 fee simple, 38, 41–42, 99 fee tail, 41–42, 96–97 feudalism, 20, 22, 28, 100; abolition of, 44–51, 54, 68, 96, 99, 127, 162, 173, 175, 178; in America, 36–42; concentrated ownership under, 55; in England, 32–36, 98; regulation’s role in abolishing, 42–44 Filene’s (department store), 116–17 First Amendment, 45 See also freedom: of speech; religious freedom food and drug laws, 166 foreclosure, 81, 83, 86–87, 88, 103–5, 106–7, 113, 151, 153; regulation of, 158; secretiveness and, 148; solving dilemmas of, 140–46; during subprime crisis, 130–40 forfeiture, 112 Fourteenth Amendment, 102 fraud, 3, 4, 12, 20, 69, 77–78, 80, 125–26, 132, 165, 167, 169, 174 See also deception freedom, 18; common understanding of, 159; complexity of, 9; founding myths and, 27–28, 29–30; law and, 7–10; as liberal value, 22–23; mistaken views of, 5, 13, 16, 155–56; paternalism vs, 88–94; political vs economic, easements, 112, 150 Edward the Confessor, 32 efficiency, 31, 64, 66 Ellison, Larry, 97, 99 eminent domain, 112, 117, 118, 120 employment at will, 108 employment discrimination, 46, 49, 72 See also civil rights laws encumbrances, 41, 112, 129, 130, 132, 141, 147–50, 151 entail, 41–42, 96–97 environmental law, 17, 18, 69, 70, 72, 86, 113, 158, 162, 168 See also pollution equality, 9–10, 19, 24, 29, 56, 128, 159; as conservative value, 11, 43, 44, 163, 164, 169; institutionalization of, 45–46; of opportunity vs equality of outcomes, 163–64 equal protection, 102, 119, 120 equity: courts of, 103; in property, 83, 84, 86, 87, 134 escheatment, 41 estates, 113, 127 eviction, 103, 104–5, 106, 112–13, 139, 145, 157, 167 expectations, 69, 85, 96, 106, 108; justifiability of, 105; legal protections for, 17, 21, 62, 65, 73, 87, 92, 126, 128, 150, 155, 169 externalities, 64, 86, 89, 117, 163, 190 n 211 Index freedom (continued) 91–92; of religion, 45, 46, 102, 112, 120, 121, 127, 159, 172; of speech, 49, 50, 53, 121–22, 159 Freedom to Display the American Flag Act (2005), 51–53 freeholding, 37, 38, 45, 98 indentured servitude, 28, 43, 47, 96, 170, 171 independent contractors, 108 Indian treaties, 37 inequality, 99–100, 101, 173 information costs, 149 inheritability, 38, 41 insurance, 72, 91 intellectual property, 17, 96, 110 internalization of costs, 31 intestacy, 41 gender discrimination, 20, 46, 72, 112, 167 See also civil rights laws gentrification, 119 Gibson, Walter, 97 Golden Rule, 114–16, 124, 126 good faith duty, 126, 168 government shutdowns, 3, 26 Gramlich, Ned, 78 Great Britain, 28 Great Depression, 6–7 Great Recession, 116 Greenspan, Alan, 4–5 guilds, 170, 171 James, duke of York, 36 Jennifer Government (Barry), 180–81 John, King of England, 34 Kahneman, Daniel, 90 Kelo v City of New London (2005), 117 labor contracts, 46 labor unions, 174 Lamp, Donald, 51–53 landlord-tenant law, 61–62, 99; democratic features of, 47–48; foreclosure in, 103, 104–5; landlord’s obligations in, 120, 167; nonpayment of rent in, 106, 112–13; power imbalance in, 55; as vestige of feudalism, 40 land use regulation, 17, 72, 113, 115 legal realism, 183–84 n 11 Lenni-Lenape Indians, 37 Levitin, Alan, 154 liberalism, 4, 5, 7, 9, 10, 162–63; consumer protection and, 21; habitability, 106 Harold (Godwinson), King of England, 32 Hawaii, 97–99, 110 Hayek, Friedrich, 183 n 10 Henry II, King of England, 34 Hobbes, Thomas, 27, 30, 62 homeowners’ associations, 51–52, 70, 111 homeownership, 23, 54, 81, 173 homestead laws, 109 housing codes, 106 housing discrimination, 18, 46, 49, 72, 188 n 41 See also civil rights laws housing inspection, 63 212 Index markets compatible with, 22, 157, 169–76; new paradigm and, 11–15; property rights deemphasized by, 171–76; redistribution and, 101, 175–76 libertarianism See conservatism liens, 129, 132, 133, 150 Locke, John, 7, 27, 28, 30, 172, 177 monopoly, 96, 111, 127, 162, 170, 171 Montgomery, Robert, 175 morality, 123–26 mortgage-backed securities, 16, 79, 81 Mortgage Electronic Registration Systems (MERS), 131–41, 145, 147–49, 151–54 mortgages, adjustable rate, 78, 81, 136 Murdock, David, 97 Murray, Charles, 185 n 20, 188 n 34 Maddow, Rachel, 49 Magna Carta, 34 manorial courts, 34 marital property, 102–3, 127, 167 marriage, 72 Married Women’s Property Acts, 46, 102 Marsh, Tanya, 154 Massachusetts, 36, 103, 104, 129, 189 n 45 Massey Energy Company, 70–71 Medicare, 26, 91 Michigan, 151 Mill, John Stuart, 1, 172 minimum standards, 2, 72, 73, 76, 94, 96, 122, 155, 175, 178, 182; bargaining compatible with, 66–67; conservatism compatible with, 22, 68; in consumer protection laws, 126; of contracts, 125; democratic roots of, 19, 23–24, 68, 92; efficiency of, 64, 66; freedom of contract promoted by, 69, 74; for housing, 63, 75, 77; uncertainty reduced by, 67 minimum wage, 164 mining, 70–71 monarchy, 28, 45 natural resources law, 113 negligence, 124–25, 126, 168 negotiable instruments, 16–17, 113, 130, 135 New Jersey, 36–38, 40, 47–48, 55, 98 New York, 36, 38–40 Nicolls, Richard, 36 nominees, of mortgagees, 133–34, 137, 138 nonwaivability, 64, 66, 67 Noonan, Peggy, 13 Nozick, Robert, 55–56, 118 Nudge (Thaler & Sunstein), 90 nuisance, 127, 168 Obama, Barack, 58 Obamacare, occupational safety, 70–71, 72, 162 Occupy movement, 99 Once and Future King, The (White), 93 Oracle Corporation, 97 213 Index Oregon, 115–16 overuse, 31 Parliament, 34 partnerships, 16, 113 patents, 17 paternalism, 88–94 Paul, Rand, 48–49, 50 peasants, 33, 34, 35 Pennsylvania, 147 perfect information, 90 Pierson v Post (1805), 30–31 polarization, 14, 21, 157, 177 pollution, 17, 18, 69, 70, 72, 86, 113, 127, 166 See also environmental law prepayment penalties, 83 privacy, 48, 128 property rights: consumer protection and, 59; in democracy, 96–97; duration of, 107–11; Golden Rule, and 114– 16; legal framework for, 2, 3, 4, 5–6, 17; liberalism’s disregard of, 171–76; limitations on, 111–13, 126–27; rhetoric of, 12; standard vs customized, 62, 65; of women, 46, 96, 102–3 proprietors, 37 public accommodations, 49–50, 102, 112, 120, 167, 174 Pullman Company, 98, 110–11 quarter-sale provision, 39 quiet enjoyment, 62, 114, 120–21, 168 racial discrimination, 46, 72; in housing, 18, 112, 188 n 41; in 214 public accommodations, 49–50, 102, 112, 120, 167, 174 See also civil rights laws; segregation Reagan, Ronald, 11 real estate finance, 16 recording of titles, 112, 121 redistribution, 35–36, 44, 55–56, 101, 163, 175–76 refinancing, 82–83, 85, 136 relative hardship, 109–10 religious freedom, 45, 46, 102, 112, 120, 121, 127, 159, 172 remedies, 167 Rensselaer, Kiliaen van, 38–39 right to exclude, 31, 47–48, 49–50, 97–98, 112, 118, 173 robo-signing, 130, 143, 145 Romney, Mitt, royal courts, 34–35 Ruggles, Charles, 39–40, 41 Schwartz, Alan, 60 secured transactions, 17, 113 securities regulation, 80 securitization, 16, 79, 81, 106, 142 security, segregation, 20, 48, 50, 163, 173, 178 self-help eviction, 113 serfs, 33, 34 servitudes, 127 setbacks, 63, 111, 114 sexual orientation, 46 Shelley v Kramer (1948), 102 Sinclair, Upton, 71 slavery, 20, 28, 38, 46, 49, 68, 96, 100, 127, 163, 173, 175, 178 Smith, Henry, 149 Index social contract, 27, 30 Social Security, 26, 91, 166 South Africa, 100 state of nature, 30 statute of frauds, 129, 140, 141, 142, 143 Stiglitz, Joseph, subinfeudation, 33 subprime mortgage crisis, 24, 173; causes of, 2, 19–20; deceptiveness of, 77–82, 167; foreclosure during, 130–40; intricacies of, 106; lessons of, 1–2, 4, 7, 15, 16, 18, 21, 23, 54–55, 59, 128, 152–53, 168, 177, 179; liberals alarmed by, 22; mortgage transfers during, 130–45, 155; unfairness of, 81–88 Sunstein, Cass, 90 Tea Party, 2–3, 26, 157 tenancy: feudal, 33, 34–35, 39–40; modern, 40, 47–48, 55, 61–62, 99, 103, 104–5, 106, 112–13, 120, 167 Thinking, Fast and Slow (Kahneman), 90 Thirteenth Amendment, 45 Thomas, Clarence, 51 title, to property, 17, 21, 103–4, 167; recording of, 112, 121; re-creating system of, 150–56; undermining of, 128–50 title insurance, 141 titles of nobility, 26, 28, 33–35, 44, 45, 56, 100, 118–19, 159, 162, 163, 178 torts, 122, 123, 124, 126, 128 tragedy of the commons, 31 transaction costs, 73 trusts and estates, 16, 113 Truth in Lending Act (TLA), 192 n 26, 202 n 85 “underwater” houses, 83, 84 unemployment benefits, 26 Uniform Commercial Code, 130, 135, 153 unions, 174 United Negro College Fund, 188 n 35 unmarried couples, 187 n 30 vassals, 33 villeins, 33 voting, 38 waivability, 64, 66, 67 Waldron, Jeremy, 101 Warren, Elizabeth, 84 water law, 113 Waxman, Henry, 4–5 Weintraub, Joseph, 48 White, Alan, 151–52, 154 White, T H., 93 Whitman, Dale, 154 William the Conqueror, 32–33, 98 wills, 16, 41, 112 women: in early America, 38; under feudalism, 33–34; property rights of, 46, 96, 102–3 Woolf, Virginia, 101 workplace safety, 70–71, 72, 162 Zacks, Dustin, 154 zoning, 63, 69–70, 82, 86, 111, 114–16, 120, 162, 168 215 .. .No Freedom Without Regulation This page intentionally left blank No Freedom Without Regulation The Hidden Lesson of the Subprime Crisis JOSEPH WILLIAM SINGER New Haven and... democratic means Freedom entails government of the people, by the people, and for the people The liberty we cherish is not the absence of regulation; it is the freedom to live with others under rules... kind of freedom But freedom of action without limits is not liberty Regulations may seem to deny us freedom, but regulation is just another word for the rule of law.” Conservatives revere freedom,