Katie Porter’s posts and scholarship about illegal fees tacked on by mortgage servicers to defaulted mortgages raise an interesting question: why aren’t states reconsidering non-judicial foreclosure? Non-judicial foreclosure is generally faster and cheaper than judicial foreclosure, which is a good thing, at least for the foreclosing lender as it reduces loan losses. And as Karen Pence has shown, there is a reduced supply of credit in states with judicial foreclosure. But as the name implies, non-judicial foreclosure lacks court oversight, and this raises the possibilities for abuse.
[UPDATED LINK 3.4.08 at 5:06pm]