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Cities Mull Using Eminent Domain To Seize Mortgages
IBD ^ | 01/08/2014 | By ANDREA RIQUIER

Posted on 01/08/2014 7:15:01 AM PST by SeekAndFind

As a real estate agent in the struggling San Francisco Bay city of Richmond, Zina Hall is well acquainted with all ways of helping troubled homeowners. Hall spent months this autumn working with an elderly widow with a medical condition who was struggling to make payments. Her best option, Hall believed, was a short sale, and they began that laborious process.

But after several weeks, the homeowner disappeared, then called Hall to say she wanted to pull out and use a new program by the city.

"They have eminent domain and it's going to help me," Hall recalled her saying.

Governments typically use eminent domain to seize land for public or private projects. But Richmond is mulling using its powers to seize the loans themselves from mortgage-backed securities. The holder of the securities would receive cash, roughly equal to what the home is currently worth. The homeowner would see his or her principal reduced to near fair-market value.

The idea has met with howls of outrage from investors in mortgage-backed securities, pushback from lenders, and some disapproval from federal regulators. It would apply only to mortgages in "private label securities" — those not guaranteed by the government or held by banks — about 10% of the market.

(Excerpt) Read more at news.investors.com ...


TOPICS: Constitution/Conservatism; Culture/Society; Government; News/Current Events
KEYWORDS: cities; eminentdomain; mortgage

1 posted on 01/08/2014 7:15:01 AM PST by SeekAndFind
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To: SeekAndFind

We really do get the government we deserve, don’t we? People are so freaking retarded that they don’t understand what half of these legal tenets mean, but they SOUND good!


2 posted on 01/08/2014 7:17:06 AM PST by rarestia (It's time to water the Tree of Liberty.)
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To: SeekAndFind
That would be called theft, if it wasn't a government doing it.

/johnny

3 posted on 01/08/2014 7:18:04 AM PST by JRandomFreeper (Gone Galt)
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To: FReepers

Click The Pic To Donate

Support FR, Donate Monthly If You Can

4 posted on 01/08/2014 7:26:49 AM PST by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: SeekAndFind
Hmmm. I read some other articles about this.

I don't know what the mortgagees are howling about. They should not be losing a dime. If the city wants to seize a mortgage to avoid forceclosure, then they should pay every dime with interst that is owed. But I suspect they are not.

Even if they are, the city (government) has no right to do this. The article mention lawsuits, which is the correct response to this "Eminent Domain". I hope this idea fails.

5 posted on 01/08/2014 7:26:50 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: JRandomFreeper

Everyone has blood on their hands when it comes to the housing markets, mortgages, and prices.

The first thing to realize is that we do not have a free market argument to fall back on here. Government, banks, etc., have all so regulated, coerced, cronied, and winked at everything from fake interest rates, to fake money, to fake appraisals, to fake loans that housing being a free market is like saying North Korea is a free country.


6 posted on 01/08/2014 7:27:55 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins

What nonsense.


7 posted on 01/08/2014 7:31:18 AM PST by bill1952 (Choice is an illusion created between those with power - and those without)
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To: SeekAndFind
It would apply only to mortgages in "private label securities" — those not guaranteed by the government or held by banks — about 10% of the market.

That is the intent. Destroy the 'private securities' market, so that only banks and 'approved' lenders can invest in mortgages...........

Ayn Rand had it right. :

"Needless to say, under either system [socialism or fascism], the inequalities of income and standard of living are greater than anything possible under a free economy -- and a man’s position is determined, not by his productive ability and achievement, but by political pull and force. Under both systems, sacrifice is invoked as a magic, omnipotent solution in any crisis -- and “the public good” is the altar on which victims are immolated."

8 posted on 01/08/2014 7:32:10 AM PST by Red Badger (Proud member of the Zeta Omicron Tau Fraternity since 2004...................)
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To: SeekAndFind

Cities who are contemplating this should heed the cautionary tale of the Genesee Towers in Flint, Mich.

The tallest building in Flint, it was left mostly vacant when NBD, successor to Genesee Bank, again merged and pulled out of it’s former headquarters. Some Indian fellow from Oakland County bought the 19 story building for $500K. He did not keep up on the maintenance, and within a few years large chunks of concrete began falling to the pavement below.

Faced with a public safety hazard, the city of Flint took the building via eminent domain and paid the guy $500K. “But wait a minute,” he said, “you have me assessed at $5 million!” The case wound it’s way all the way up to the Michigan Supreme Court, which agreed with him and ordered the City of Flint to pay him $5 million, which the city did not have.

Everybody got a supplemental tax bill to pay off the “Genesee Towers Assessment”. The building was beyond repair and was brought down via controlled demolition just before Christmas.

Localities out there could easily end up in a similar situation with these mortgage holders.


9 posted on 01/08/2014 7:45:02 AM PST by Buckeye McFrog
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To: SeekAndFind; nickcarraway; SmithL; NormsRevenge

10 posted on 01/08/2014 7:45:26 AM PST by martin_fierro (< |:)~)
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To: DJ MacWoW

“It is only when the people become ignorant and corrupt, when they degenerate into a populace, that they are incapable of exercising their sovereignty.”
James Monroe


11 posted on 01/08/2014 7:45:49 AM PST by faithhopecharity (no)
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To: bill1952

I have a housing market crash as proof.


12 posted on 01/08/2014 7:46:50 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: SeekAndFind
Plank #1 of the Communist Manifesto is the abolition of private property rights.

All property (and money, of course) rightfully belongs to the government.

13 posted on 01/08/2014 7:50:28 AM PST by E. Pluribus Unum (Who knew that one day professional wrestling would be less fake than professional journalism?)
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To: SeekAndFind
But Richmond is mulling using its powers to seize the loans themselves from mortgage-backed securities.

How is this legal? Loans are paper--seizing the mortgages and then claiming ownership of the property, and then giving away the seized property is rather indirect. And, redistribution of physical property to bankrupts is not a compelling common interest. The mortgagors never really owned the property--they were renting it from the lienholders (banks).

14 posted on 01/08/2014 7:51:01 AM PST by Pearls Before Swine
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To: SeekAndFind

Russia’s kleptocracy is a piker-version of ours.


15 posted on 01/08/2014 7:52:19 AM PST by Lazamataz (Early 2009 to 7/21/2013 - RIP my little girl Cathy. You were the best cat ever. You will be missed.)
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To: faithhopecharity

The Founders had such wisdom and few hear their warnings.


16 posted on 01/08/2014 7:54:20 AM PST by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: SeekAndFind

If cities can use eminent domain to take underwater mortgages, couldn’t they use eminent domain to take unsustainable public employee pension rights?


17 posted on 01/08/2014 7:56:15 AM PST by omega4412
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To: SeekAndFind

First it was to build sidewalks, or to widen the streets. Then to build schools and roads. Then as a favor to private developers (who rewarded the politicians).

Now its for whatever the government wants to do. No private property is safe.

Communist manifesto: all private property must be seized by the government. (not the exact words)


18 posted on 01/08/2014 9:00:25 AM PST by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: SeekAndFind

Such actions would freeze the private money lenders and those who cannot get money at the normal banks, etc, would be losing their homes—10% of the market, according to this article.

Meanwhile, a local ‘real estate’ TV show had information that Hedge Funds are buying up properties that are being short-saled. One such hedge fund bought 30 properties in the last 2 months in Sacramento alone.

I am assuming such homes will be cleaned up & RENTED for income until the market gets some sort of recovery and then the house will be sold for another profit.

For totally broke municipalities to be taking over homes that are underwater isn’t the answer. Maybe the cities should form their own hedge funds to do this action.


19 posted on 01/08/2014 9:08:45 AM PST by ridesthemiles
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To: martin_fierro

That set of pics must have been taken around 1959.


20 posted on 01/08/2014 9:10:16 AM PST by ridesthemiles
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To: omega4412
"If cities can use eminent domain to take underwater mortgages, couldn’t they use eminent domain to take unsustainable public employee pension rights?"

Coming soon, If you like your pension plan, you can keep it..."
21 posted on 01/08/2014 9:24:49 AM PST by The Louiswu (One brave man, that's all we need.)
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To: xzins

Thank You brother, I knew I couldnt have been the only one seeing this connection


22 posted on 01/08/2014 10:59:40 AM PST by pmac (From the lawless regions of Eastern Ca, next to free America)
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