Have you heard that expression, "Don’t make a federal case out of it?" It’s usually used to caution against blowing something out of proportion. Two recent decisions from federal courts in Ohio explained why the courts have an obligation to take issues of standing seriously and made clear that if you want to make a federal case out of it, you have to follow the federal court’s rules. As Elizabeth Warren explained, the decisions are a reminder that the law matters. And in federal court, at least some judges are going to require the lenders to follow **all** the rules, an outcome that the lenders apparently asserted was not the situation in state court.

But why are these foreclosures in federal court? Foreclosure is a state law action, and a vast majority of such actions are filed in state courts. Apparently, the holders of the mortgages (or should I say "putative" holders of the mortgages?) are frustrated that some state courts in Ohio and other jurisdictions are taking a long time to adjudicate foreclosure cases. The cause of the delay is that the state courts are overwhelmed by the sheer number of foreclosure actions being filed. In many jurisdictions, foreclosures go to a specially-designated division of state court and as foreclosure rates have climbed rapidly, these judges and their staffs can’t keep up with the backlog.

Should we be reassured that families at risk of losing their home are in federal court? My students sometimes express the belief that federal courts are "better"–and they presumably absorb that idea in part from their legal education, which tends to favor having them read federal court decisions. But are federal courts really more likely to ensure that lenders comply with the applicable laws that govern foreclosure?

This is an an empirical question waiting for an answer, but I’ll offer a couple of observations. First, in half the states, foreclosure is a non-judicial process. The process involves notice and a delay, but no lawsuit is filed and no judge rules on the merits. Thus, moving foreclosures to federal court isn’t going to effect these cases in the normal course. Second, consumers could turn the tables on lenders and remove a foreclosure filed in state court to federal court. If the process is better in federal court, this should happen. The barrier, of course, if that most consumers do not retain an attorney when facing foreclosure. They represent themselves, and aren’t familiar with the procedure and rules for civil procedure. Third, will federal judges really do a better job? While the federal Ohio decisions (by Judge Boyko and Judge Rose) are encouraging in this regard, anyone who teaches consumer law is familiar with the distaste of the federal bench for dealing with "hypertechnical" consumer laws. Will judges on the federal bench educate themselves on the intricacies of state foreclosure like statutory redemption? Will they bone up on substantive defenses to foreclosure like TIL rescission? How will they cope with the large number of pro se litigants or in some parts of the country, the sheer additional number of cases?

Despite the "Paulson" plan, I believe that thousands of families will still face foreclosure and the number is going to continue to grow in the next year. For these families, the process matters.