Oh Goody, next thing you know a 50% down payment will be required to buy a house and liberals will be shocked, just SHOCKED. How could this have happened. Those big bad banks.G_j (31,649 posts)
..more..'Eminent Domain for the People' Leaves Wall Street Furious
Published on Wednesday, August 7, 2013 by Common Dreams
' Domain for the People' Leaves Wall Street Furious
Housing justice advocates hopeful about innovative Richmond plan to use public seizure laws to save underwater homes from foreclosure
- Sarah Lazare, staff writer
Using the authority of state government to actually help people has Wall Street bankers in a panic, spurring threats of aggressive legal retaliation against the town of Richmond, California simply for trying to help some of its struggling homeowners.
'Eminent domain' has long been a dirty term for housing justice advocates who have seen municipalities invoke public seizure laws to displace residents and communities to make way for highways, shopping malls, and other big dollar projects.
But in Richmond, city officials are using eminent domain to force big banks to stop foreclosing on people's homes in an innovative new strategy known as 'Principle Reduction' aimed at addressing California's burgeoning housing crisis.
Richmond became the first California city last week to move forward on a plan that has been floated by other California municipalities to ask big bank lenders to sell underwater mortgage loans at a discount to the city (if the owner consents), and seize those homes through eminent domain if the banks refuse. The city has committed to refinancing these homes for owners at their current value, not what is owed.
City officials launched this process by sending letters in late July to 32 banks and other mortgage owners offering to buy 624 underwater mortgages at the price the homes are worth, not what the owners owe.
Star Member think (3,887 posts)
1. Corporate blowback. AKA
Karma....Skink (8,800 posts)
4. The banks were essentially clearcutting whern they made loans that were unaffordableHiPointDem (20,545 posts)
6. or loans that were liable to default/ kr/ clearcutting indeed.Rain Mcloud (590 posts)
9. Ah,did the big bad,bankie wankies get their cockroach feelies hurt?
To coin a phrase from their sycophant's play book:
"Get over it!"Lee-Lee (391 posts)
15. I worry about the unintended consequences from this
as in, will any lenders be willing to make loans in these cities going forward, knowing that they stand the risk of taking a huge loss any time values drop and the municipality seizes the property just to refinance the homeowner.
It certainly will have to factor into their risk analysis going forward. They will likely either refuse to lend in these areas or set much higher requirements for down payment and credit scores.jtuck004 (5,703 posts)
38. "will any lenders be willing to make loans in these cities going forward,". Good. Fuck 'em.
They are criminals, and if they want to take their little criminal enterprise elsewhere, don't let the bank vault door hit 'em in the ass.
We have the GSE's, unless the PTB decides to gift wrap them and hand them over. Otherwise there will be others who will step in. And if they are not local, there are investors all over the world who will take that "chance", which is, today, a far better risk than it was in past years.
Frankly, we should chase them out and start over.