Call it Son of Kelo. Or, maybe, Hey, What Could Possibly Go Wrong?
WSJ:
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.
[…]
Eminent domain allows a government to forcibly acquire property that is then reused in a way considered good for the public—new housing, roads, shopping centers and the like. Owners of the properties are entitled to compensation, which is usually determined by a court.
But instead of tearing down property, California’s San Bernardino County and two of its largest cities, Ontario and Fontana, want to put eminent domain to a highly unorthodox use to keep people in their homes.
The municipalities, about 45 minutes east of Los Angeles, would acquire underwater mortgages from investors and cut the loan principal to match the current property value. Then, they would resell the reduced mortgages to new investors.
The eminent-domain gambit is the brainchild of San Francisco-based venture-capital firm Mortgage Resolution Partners, which has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors.
Proving again, that property rights, like the right to choose your own doctor, showerhead, lightbulb or Big Gulp, are only the fever dreams of bitter clingers.
this sort of thing gives harvard trash like John Roberts a huge motherfucking hardon
I seem to remember something about “without Just Compensation” somewhere in that Fifth Amendment….. which would be the payoff value of the loan, since that’s what’s being taken.
I suspect they’ll start out by asking the current lenders if they wouldn’t rather take the haircut “voluntarily.”
“Just” compensation for “predatory” lenders? Now that’s funny.
Almost as funny as the upside down homeowners who think this is a way to make them rightside up again, instead of a way for one group of investors to use government to screw over another group of investors.
And didn’t investors used to be called “banks”?
Because nothing will improve the housing market faster than doubling down on the moral hazards that effed it up in the first place.
And why not? We’re doing it with health care.
In California, I can’t see an agreeable judge being a problem.
The Bankruptcy Code actually allows for a similar treatment of mortgages – not seizing them, but writing them down to current value of the property. It’s called a “cram-down” and is allowed in most cases except where the real property is the debtor’s principal residence.
I can’t say that I’ve ever heard of emminent domain being used to seize personal property (a mortgage). But, as I’ve been noting of late, the Rule of Law has given way to the Rule of Making Shit Up As We Go.
“Acquire.” As in, “went down to the liquor store and acquired us a few bottles and a handful of Benjamins at the mere cost of a little exercise and some strategic conversation.”
I’m confused. How do “investors” play into this ? I’m not entirely against this idea if it were used to seize homes currently owned by banks, then re-mortgage them to the current residents at market value. No investors needed.
It’s hard to tell whether a fascist who recognizes he’s confused is any more dangerous than one who doesn’t. Either way though, being a fascist is no way to go through life.
*pwahhhhhhhhh*
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Carpe home, people!