#1 ' Domain for the People' Leaves Wall Street Furious
08-08-2013, 12:21 AM
- Join Date
- May 2008
G_j (31,649 posts)
'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.
08-08-2013, 07:49 AM
DUmmies always "forget", no one forced people to sign the loan papers in the 1st place.
And even if this scheme plays out, the odds are the people will default again on the lower mortgage
as has been happening on others that got their loans changed.May the FORCE be with you!
08-08-2013, 12:06 PM
- Join Date
- Mar 2010
I know that some here side with the banks for whatever reason. However, the context of the issue isn't simply that the banks lent money to people who should have known better than to borrow that much money against a fluctuating asset. The banks didn't do this out of the goodness of their hearts, they did it to generate securities which they sold and made a bundle on in a game of high stakes hot potato.
For their part, my dear friends in the Bay Area are severely mathematically challenged. They like to backhandedly brag about how much it costs to live there, but they won't address the four enormous contributors to the cost of housing:
1- Illegal aliens. Albeit fixing this would be a somewhat shortlived drop in housing cost, it would still make a difference. If there are 500,000 illegals in the Bay Area, then we're looking at about 100,000 housing units which would be liberated by their deportation.
2- Section 8 I know it's not compassionate, but the simple fact is that while the poor have to live somewhere, they don't have to live on prime real estate and there is no excuse for them living in the Bay Area at all, when the children of the middle class will come from all over American to flip burgers and clean toilets just for bragging rights to be a "San Franciscan".
3- "Historic easement" Now you know that this went over like a fart in church, but other than select landmarks like Mission Dolores very little in California is of historical significance. Washington never slept anywhere. Most of the "charming victorians" are falling down wrecks which have been spiffed up somewhat on the inside and look like warmed over shit on the outside. In fact, a lot of the Bay Area looks like part of Havana and Puerto Rico that no one wants to live in.
4- Park land. Enormous areas outside SF are off limits because they belong to the parks. Mind you that no one uses these parks, they are essentially coastal deserts.
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