Iminent domain to be used to seize underwater mortgages? wtf?

Discussion in 'Economy' started by Grampa Murked U, Jul 5, 2012.

  1. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,719
    Thanks Received:
    8,800
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,986
  2. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,719
    Thanks Received:
    8,800
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,986
    Chris always brags about the housing market humming along just fine. Wonder what he will think of this abuse of govt power to strip private investors of their interest and giving it to someone else.

    This reeks of what Obama did with GM's stock holders.
     
  3. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,719
    Thanks Received:
    8,800
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,986
    A trio of of local governments – San Bernardino County, Fontana and Ontario – have created a Joint Powers Authority (JPA) in an effort to help “underwater” homeowners that may result in the use of seizure powers to buy mortgage-backed securities.

    Placing securitized mortgages in the hands of local governments, as opposed to far-flung private investors could give homeowners a better chance of negotiating favorable loan modifications, said Cornell University professor Robert Hockett.

    Hockett is a consultant for San Francisco-based Mortgage Resolution Partners, which is pushing the eminent domain plan in San Bernardino County and to officials in seven other states.

    The eminent domain idea, however, has also captured the attention of nearly 20 organizations representing local Realtors as well as the banking and financial services industries.

    And they don’t like it.

    Writing that using eminent domain to seize mortgage loans raises “very serious legal and constitutional issues,” the trade groups contend the plan could be “immensely destructive to U.S. mortgage markets by undermining the sanctity of the contractual relationship between a borrower and creditor.”

    http://www.loansafe.org/business-groups-resist-san-bernardino-county-eminent-domain-proposal
     
  4. Mr.Nick
    Offline

    Mr.Nick VIP Member

    Joined:
    May 10, 2011
    Messages:
    9,604
    Thanks Received:
    682
    Trophy Points:
    83
    Ratings:
    +682
    Wouldn't that be a Fifth Amendment violation?
     
  5. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,719
    Thanks Received:
    8,800
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,986
    I understand that they are trying to help people but this is an awful idea. Setting the govt up as an all powerful entity. This kind of crap can not be allowed to go unchallenged.
     
  6. Mr.Nick
    Offline

    Mr.Nick VIP Member

    Joined:
    May 10, 2011
    Messages:
    9,604
    Thanks Received:
    682
    Trophy Points:
    83
    Ratings:
    +682
    Yeah it is a clear-cut Fifth Amendment violation.
     
  7. Grampa Murked U
    Offline

    Grampa Murked U Diamond Member

    Joined:
    Jun 13, 2011
    Messages:
    47,719
    Thanks Received:
    8,800
    Trophy Points:
    2,055
    Location:
    Kansas City
    Ratings:
    +23,986
    The really stupid thought process for this in California is insane. The state is on the verge of bankruptcy and the process of doing this involves lowering the property values of these homes. Thus creating an even bigger hole in their budget.
     
  8. iamwhatiseem
    Offline

    iamwhatiseem Gold Member

    Joined:
    Aug 19, 2010
    Messages:
    14,833
    Thanks Received:
    3,114
    Trophy Points:
    280
    Location:
    Virginia
    Ratings:
    +6,128
    Jesus...:(

    The speed at which our nation is disappearing before our eyes and losing everything we were built on is getting epidemic.
     
  9. Trajan
    Offline

    Trajan conscientia mille testes

    Joined:
    Jun 17, 2010
    Messages:
    29,048
    Thanks Received:
    4,751
    Trophy Points:
    48
    Location:
    The Bay Area Soviet
    Ratings:
    +4,756
    the guts of the plan;


    Cities Consider Seizing Mortgages

    snip-

    The eminent-domain gambit is the brainchild of San Francisco-based venture-capital firm Mortgage Resolution Partners, which has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors. The company's chief executive, Graham Williams, is a mortgage-industry veteran who helped pioneer lending programs for low-income borrowers at Bank of America Corp. BAC -1.74% in the early 1990s. Its chairman, Steven Gluckstern, is an entrepreneur who once owned the New York Islanders hockey franchise. Evercore's founder and co-chairman, Roger Altman, served in the Clinton administration and is raising funds for President Barack Obama's re-election effort.

    For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program's private financiers would fund the city's seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors.

    more at-
    Cities in California Consider Seizing Mortgages - WSJ.com

    this sounds like a gross abuse of eminent domain imho. And notice my emphasis , the bolded portion, in other words, we are on the hook.
     
  10. tenthertoo
    Offline

    tenthertoo ...worst of all I'm DULL

    Joined:
    Dec 30, 2011
    Messages:
    221
    Thanks Received:
    19
    Trophy Points:
    51
    Location:
    Deep South
    Ratings:
    +19
    Sorry I posted on the same subject 10 minutes behind you - My wrinkle was that the "problem" was caused by run away speculation , buying houses not to live in but as speculation. Thus causing the "bubble" that like all bubbles eventually burst.
     

Share This Page