Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Truth-Out: "Using Eminent Domain to Rescue Main Street"
Now THIS is what I call a creative use of eminent domain: municipalities using eminent domain to seize homes whose mortgages are under water (either because of predatory banking practices or because of lost jobs or income as a result of the recession); then allowing the original owners to refinance at a lower principal. Not surprisingly, the article says that banks, as well as real estate and securities lobbying groups are furious about it, but there doesn't appear to be much they can do legally to block it, since the government's right of eminent domain is pretty absolute. And hey, if they can use it to seize people's homes to make way for commercial developers, then they can certainly use it for this purpose!
[font size=5]Using Eminent Domain to Rescue Main Street[/font]
But homeowners who have asked banks to modify their mortgages typically get a cold shoulder or a bureaucratic runaround. So far, the Obama administration and Congress have been unwilling to require intransigent banks to reset loans.
Faced with this quagmire, a growing number of cities — with the support of community groups and unions — are taking things into their own hands. Thanks to a legal strategy initially formulated by Cornell University law professor Robert Hockett, city officials have discovered that they can use their eminent domain power — which they routinely use to purchase property for sidewalks, infrastructure, school construction and other projects — to buy underwater mortgages at their current market value and resell them to homeowners at reduced price and mortgage payments.
< . . . . >
If banks reset Richmond’s underwater mortgages to fair market value, homeowners would save an average of over $1,000 per month on their payments. If those savings were spent on local goods and services, it would generate about $170 million in economic stimulus and create at least 2,500 jobs.
< . . . . >
Wall Street is up in arms. Since several cities began discussing this strategy last year, industry lobbyists have been fighting back. In a coordinated effort involving letters, phone calls and meetings, some of the nation’s most powerful lobby groups — including the National Association of Realtors, the American Bankers Association, the National Association of Home Builders, American Securitization Forum, and the Securities Industry and Financial Markets Association (SIFMA) — have tried to dissuade local officials from pursuing the eminent domain strategy.
< . . . . >
But homeowners who have asked banks to modify their mortgages typically get a cold shoulder or a bureaucratic runaround. So far, the Obama administration and Congress have been unwilling to require intransigent banks to reset loans.
Faced with this quagmire, a growing number of cities — with the support of community groups and unions — are taking things into their own hands. Thanks to a legal strategy initially formulated by Cornell University law professor Robert Hockett, city officials have discovered that they can use their eminent domain power — which they routinely use to purchase property for sidewalks, infrastructure, school construction and other projects — to buy underwater mortgages at their current market value and resell them to homeowners at reduced price and mortgage payments.
< . . . . >
If banks reset Richmond’s underwater mortgages to fair market value, homeowners would save an average of over $1,000 per month on their payments. If those savings were spent on local goods and services, it would generate about $170 million in economic stimulus and create at least 2,500 jobs.
< . . . . >
Wall Street is up in arms. Since several cities began discussing this strategy last year, industry lobbyists have been fighting back. In a coordinated effort involving letters, phone calls and meetings, some of the nation’s most powerful lobby groups — including the National Association of Realtors, the American Bankers Association, the National Association of Home Builders, American Securitization Forum, and the Securities Industry and Financial Markets Association (SIFMA) — have tried to dissuade local officials from pursuing the eminent domain strategy.
< . . . . >
2 replies
= new reply since forum marked as read
= new reply since forum marked as read
