#1 Cities Consider Seizing Mortgages07-05-2012, 12:06 PM
BY NICK TIMIRAOS
A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth.
Investors holding the current mortgages predict the move will backfire by driving up borrowing costs and further depress property values. "I don't see how you could find it anything other than appalling," said Scott Simon, a managing director at Pacific Investment Management Co., or Pimco, a unit of Allianz SE.
Eminent domain allows a government to forcibly acquire ...
07-05-2012, 01:38 PM
It would definitely depress property values.
I think it's okay for a city to seize the property if the owner hasn't paid the taxes, whether that owner is a bank or home owner. But when they do so, they also are supposed to maintain the property. A poor city won't be able to maintain a lot of empty buildings.
The trick is for the city to force the owners (including the banks) to maintain the properties. Detroit doesn't do this well, the need is too high and the resources too few. Grand Rapids, on the other hand, manages this pretty well.
07-05-2012, 08:31 PM--Odysseus
Sic Hacer Pace, Para Bellum.
Before you can do things for people, you must be the kind of man who can get things done. But to get things done, you must love the doing, not the people!
07-05-2012, 11:19 PM
No part of government wants to work within the confines of what they are intended for, if we ever rein in the fed we still have state and local to bring back under control, an insurmountable task.
07-06-2012, 12:16 AM....may invoke their eminent-domain powers to restructure mortgages .....
- Join Date
- Mar 2010
OK....So I owe 200K on a property that is worth 150K. And the cities are trying to do...what?
07-06-2012, 10:30 AM
- Join Date
- Mar 2010
I heard a follow up on a podcast this morning.
The cities are trying to capture the entire mortgage, and then resell it at the market rate. In other words, in the above example they will buy my 200K mortgage (for 200K, I suppose) and then let it out again at 150K.
Only a politician who has seen too many car lot ads would think of this. I suppose they think they're going to make it up in volume or some such thing............I dunno.
|« Previous Thread | Next Thread »|