Professor turner:leg100 | Local Lawsuit | | | Strayer UniversityChante.McCants | 8/17/2012 |

CONSTITUTIONAL LAW — PERSONAL JURISDICTION — N O R TH
CAROLINA SUPREME COURT FINDS NO JURISDICTION OVER
N EW YORK TRUST. — Skinner v. Preferred Credit, 638 S.E.2d 203
(N.C. 2006), reh'g denied, 643 S.E.2d 591 (N.C. 2007).

In early March 2007, the Dow Jones Industrial Average plunged nearly 250 points when missed payments by subprime mortgage holders hit a four-year high. Later that month when the Senate Committee on Banking, Housing, and Urban Affairs held hearings on what analysts were already calling a mortgage market crisis, the issues of subprime lending was firmly thrust into the national spotlight By the time Congress began this effort to protect hard-working Americans from unscrupulous financial actors, however, subprime mortgages offered to borrowers whose flawed credit history prevents them from obtaining prime rates were thriving as alternative lending vehicles. Not surprisingly, this burgeoning market, and the sophisticated finical infrastructure that has grown around it, poses important questions for legislators and courts. Recently, in skinner v. Preferred Credit, the North Carolina Supreme court refused to extend personal jurisdiction to a nonresident trust that held a subprime mortgage on in-state realty, allegedly in violations of the state’s usury statutes. By examining the financial infrastructure that legally insulated the trust but ignoring the trust’s functional reach, the court failed to recognize the trust’s purposeful contracts with North Carolina and denied an important legal protection to potentially vulnerable borrowers. In January 1997, Garry and Judy Skinner closed on a second mortgage loan from Preferred Credit Corporation. The interest rate on the loan was 14.75%, and the costs charged at closing included a 3600