Article by: Michael S. Moskowitz
41 PEPP. L. REV. 633 (2014)
Across the nation, economic turmoil and the collapse of the housing market have plunged countless homeowners into financial peril. Communities large and small have watched foreclosure signs spring up and have seen the “American Dream” become increasingly elusive. Homes are now worth only a fraction of what families paid, leaving them with hefty mortgage payments for value that simply is not there. Some residents find that their only option is to walk away, defaulting on their debts and severely damaging both their personal credit and the stability of the local economy. Leaders in these communities struggle to provide aid to their constituents, usually with little to no success. They feel their pleas fall on deaf ears at the state and federal levels, leaving them to shoulder the burden alone. Government and bank programs provide limited relief, but many remain desperately in need of help. And desperate times can call for desperate measures. It is in this climate of desperation that some political leaders have turned to unorthodox solutions, willing to take bold action to solve the problems plaguing their citizens. Unbridled boldness, however, does not make a solution the right one. No matter how tempting the proposals marketed by outsiders seem to a vulnerable and desperate community, it is important that the consequences and limitations of those actions be realistically considered. This Comment aims to investigate the legal and practical implications of one of the more radical plans under consideration.