ADR's Place in Foreclosure: Remedying the Flaws of a Securitized Housing Market

Millions of Americans lost their homes during the foreclosure crisis, an unprecedented disaster still plaguing local and national economies. A primary factor contributing to the crisis has been the failure of conventional foreclosure procedures to account for the new realities of securitization and the secondary mortgage market, which transformed the traditional borrower-lender relationship. To compensate for the shortcomings of conventional foreclosure procedures and stem the tide of residential foreclosure, state and local governments turned to ADR processes for a solution. Some foreclosure ADR programs, however, have greater potential to avoid foreclosures than others.

This Article comprehensively examines the key components of foreclosure ADR programs and presents best practices for governments seeking to utilize ADR as a tool to mitigate the foreclosure crisis and re-energize the economy.