Skip to comments.California city approves eminent domain for negative equity mortgages
Posted on 09/11/2013 3:14:27 AM PDT by markomalley
Richmond, California's leaders approved on Wednesday a plan for the city to become the first in the nation to use eminent domain to acquire mortgages with negative equity.
Eminent domain allows governments to seize private property for a public purpose. Critics say the plan threatens the market for private-label mortgage-backed securities.
(Excerpt) Read more at news.yahoo.com ...
Tonight could determine whether Richmond proceeds with its controversial plan to use eminent domain to prevent foreclosures. The city so far has sent letters seeking to acquire 624 underwater mortgages at steep discounts, and has threatened that it might exercise eminent domain to seize them. It would then help the homeowners refinance into more-affordable loans.
At its regular meeting, the Richmond City Council is set to consider three different proposals that could determine whether the city backs away from the plan or moves forward.
- Mayor Gayle McLaughlin, an avid backer of eminent domain, proposes that the city set up a Joint Powers Authority to pursue eminent domain with other interested municipalities; confirm that it will not exercise eminent domain without a vote of the full City Council; and continue working with private San Francisco firm Mortgage Resolution Partners to resolve legal issues.
- Councilmember Nat Bates, who now opposes the plan, along with Vice Mayor Booze, proposes that the city withdraw the offers it made in late July to purchase 624 underwater mortgages, and amend its agreement with MRP to eliminate the option of using eminent domain to acquire mortgages
- Councilmember Jim Rogers wants the city to inform MRP that it must provide insurance to protect Richmond from litigation and damages related to eminent domain, or the plan will not proceed.
So, in other words, get an irresponsible mortgage, have the government bail you out. What a country! (/sarc)
If they actually succeed at getting away with this, expect banks and mortgage companies to blacklist that area. Good luck on getting a loan for a new home.
This mayor is a communist through and through. Just read her background on Wikipedia. She’s been bullying Chevron for some time and I would not be surprised if she tried to get them to pay for the mortgages one way or another.
Obviously she has far exceeded her level of competence. IOW, the voters ignored the Peter Principle when they elected her. Ignorant is one thing. Militant and ignorant is far worse.
cool! I’m gonna buy the most expensive joint i can find, then not pay the mortgage, and the city will tax it’s middle class to death to pay for it for me!
A direct effect of the TERRIBLE decision by SCOTUS regarding New London Connecticut.
“...delinquent and performing “underwater” mortgages...”
Performing mortgages? Really?
Mortgages that are being paid properly are subject to this also?
This is how liberals think:
My window broke. I tried to fix it by throwing rocks at it. I have a lot more broken windows now, but I’m confident I can fix those by throwing rocks at them, too. I got the idea from my neighbor, who sells me the rocks way below retail. He’s a really nice guy. I think I have a hemorrhoid, I wonder if he has any ideas...
If I were a lender I’d be blacklisting that area NOW just for even suggesting that they were going to steal my property.
Given that they are exercising ED against the property (which is immoral IMO), I wonder how the IRS will treat the ‘windfall’ they get by having their mortgages reduced. Normally the IRS would consider that ‘income’.