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The little city of Richmond, California has taken steps to do what other cities have so far only dreamed of: take on the mortgage industry to protect its residents. Other municipalities have considered using the same option as Richmond, but have backed off in the face of threats and bullying by the corporations and trusts that hold their citizens’ mortgages.

 

In an innovative step, Richmond is using eminent domain–a weapon that’s usually wielded to build sports stadiums and highways in low-income neighborhoods–to buy underwater mortgages and refinance them to keep residents in their homes. Richmond is the kind of community–low-income, with a large minority demographic–that is typically targeted for predatory lending practices. Many residents have ended up with mortgages that are three or four times the current worth of their homes.

Last month, the city sent letters to lenders and mortgage servicers offering to buy 626 underwater mortgages at the current fair market value. If the companies refuse, the city will use eminent domain to seize the mortgages. Refinancing will then be offered to homeowners via a contract the city has with Mortgage Resolution Partners, a private investment firm in San Francisco. After refinancing for a price that’s close to market value, residents will suddenly have a small amount of equity in their homes rather than being tens of thousands of dollars underwater–plus, the city can stop a persistent hollowing out of its population.

On Wednesday, mortgage-bond trustees from Wall Street companies filed a lawsuit in federal court against the city of Richmond to try and halt the process. In a laughable statement, a lawyer for some of the mortgage investors, John Ertman, wrote in an email:

Mortgage Resolution Partners (MRP) is threatening to seriously harm average Americans, including public pension members, other retirees and individual savers through a brazen scheme to abuse government powers for its own profit.

Apparently, ‘brazen schemes to abuse government powers for profit’ are the sole province of Wall Street–in Ertman’s not-so-humble opinion. The Federal Housing Finance Agency (FHFA)–a federal regulatory agency–immediately chimed in on the side of Wall Street, saying it might insist that Fannie Mae (FNMA), Freddie Mac and the Federal Home Loan Banks “limit, restrict or cease business activities within the jurisdiction of any state or local authority employing eminent domain to restructure mortgage loan contracts.”

The threat that mortgage companies would either forbid the financing of homes or raise the interest rate to prohibitive levels in communities that use eminent domain has so far caused other localities to back off of similar plans. However, Richmond Mayor Gayle McLaughlin will not be dissuaded from this path. After the companies’ lawsuit was filed, she said:

“We feel strongly that we’re on legal ground. We’re not afraid of going into the courtroom. We believe our legal reasoning will prevail.”

While the Wall Street corporations are trying to argue that this use of eminent domain is not for the good of the whole community, but rather the gain of specific individuals, the benefits to the community are clear. Among other things, stopping foreclosures would allow property values to rise and would stop a drain of the tax base.

John Vlahoplus, an officer for MRP, addressed the threat presented by the FHFA, saying:

“The FHFA was created to be independent of the mortgage industry that it regulates. But instead it has been in bed with the mortgage industry for over a year to oppose this solution to the mortgage crisis.”

Some local governments continue to evaluate the use of  eminent domain as an option, such as North Las Vegas, Nevada, and El Monte, California. But as Amy Schur, of the national movement Home Defenders League said:

“Our local electeds can’t do this alone, they need the backup support from their constituents. That’s what’s been the game changer in this effort.”

If it only took one David to fell the original Goliath, surely millions of constituents can fell the opposition of the current Goliath–otherwise known as Wall Street.

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After g bush and his repubs shut the economy down a Rockefeller likely would have defaulted on a comparable loan.

Yes the loan officers were not responsible and much of the blame is theirs.

Bumbling gw bush was out making funny quips half drunk while corporate greed had a hey-day  with his inattention. The sooner you repubs own up to the debacle and get your stupid congressmen to get behind the presidents efforts to save this country the quicker it will revive.

    The repubs are on a mission straight from the text book for hell. 

Originally Posted by Quaildog:

After g bush and his repubs shut the economy down a Rockefeller likely would have defaulted on a comparable loan.

Yes the loan officers were not responsible and much of the blame is theirs.

Bumbling gw bush was out making funny quips half drunk while corporate greed had a hey-day  with his inattention. The sooner you repubs own up to the debacle and get your stupid congressmen to get behind the presidents efforts to save this country the quicker it will revive.

    The repubs are on a mission straight from the text book for hell. 

___________________________________

The debacle began before Bush, acting on Clinton administration policy, fueled by Fannie/Freddie injection of $1 trillion into the home market.  Dems would blame Titanic sinking on Bush, if they thought they could get away with it.

 

Businesses are dealing with extremely serious changes implemented by a cokehead, toking between snorting lines.

Originally Posted by direstraits:

The debacle began before Bush, acting on Clinton administration policy, fueled by Fannie/Freddie injection of $1 trillion into the home market.  Dems would blame Titanic sinking on Bush, if they thought they could get away with it.

 

Businesses are dealing with extremely serious changes implemented by a cokehead, toking between snorting lines.

______________________

first you say "it's not bush's fault"... then you blame bush?

Originally Posted by Crash.Override:
Originally Posted by direstraits:

The debacle began before Bush, acting on Clinton administration policy, fueled by Fannie/Freddie injection of $1 trillion into the home market.  Dems would blame Titanic sinking on Bush, if they thought they could get away with it.

 

Businesses are dealing with extremely serious changes implemented by a cokehead, toking between snorting lines.

______________________

first you say "it's not bush's fault"... then you blame bush?

Funny, except the story that attempt to connect Bush with coke was dependent upon a lenient Republican judge, when there were no Republican judges in Texas.  Like I stated, Dems will attempt to distort reality to blame others. 

Meanwhile, the present occupant, a confessed cokehead, proceeds to make a dog's dinner of the economy between tokes, snorts and martinis.  Dems jest at Bush's speeches, but ignore someone who has an extremely deficient knowledge of geography and commits flubbermouth when deprived of his electronic assistant.

 

wow! back to the "teleprompter" story... i'm sure you never had a problem with any of the other presidents who used one?  what's funny is the "outrage" the rt. wingnuts show over things done/used by every potus. that's funny. rt.wingnut outrage... it shows at the strangest times. only when it's a democrat. that sure does seem hypocritical.

The only thing this will do is give the loan companies more of a reason to increase rates and penalities on those in the region who are trying to get loans or attempting to pay for them.

As in most cases, the few who are either unaable or unwilling to pay for something they legally financed will in all likelihood cause hardships on the others who are trying to do the right thing.

Originally Posted by Crash.Override:

wow! back to the "teleprompter" story... i'm sure you never had a problem with any of the other presidents who used one?  what's funny is the "outrage" the rt. wingnuts show over things done/used by every potus. that's funny. rt.wingnut outrage... it shows at the strangest times. only when it's a democrat. that sure does seem hypocritical.

___________________________________________

Its not the teleprompter use I'm referring to, its when he is deprived of its use, and his true intellect, or rather, lack thereof shines thru.  Reading comprehension, please!

Originally Posted by direstraits:
Originally Posted by Quaildog:

at a bankruptcy auction the mortgage company stands to lose more.

_________________

Yes, however, if no bankruptcy, the city may find itself saddled with the debt, if it claims the property.

==========

Ok, I'm coming off the cuff here as I am not a lawyer, and it's been a really long time since I took 7th grade Civics, but I tend to think that when a property is seized for "eminent domain ", whomever the property is seized FROM is paid what is deemed to be the "fair market value" of that property at that time, not what is owed on it, not what the owner thinks (like the recent case here on Wilson Dam Road) , but fair market value. Now, the owner is free to challenge that amt in court, but that does not mean they will get more.

Therefore, if the city does manage to acquire these houses via eminent domain  at fair market value, and then turn around an do whatever they want to with them, the city is not liable for however much the banks originally loaned on them. That loss , will be to the bank's stockholders.

 

Originally Posted by direstraits:
Originally Posted by Crash.Override:

wow! back to the "teleprompter" story... i'm sure you never had a problem with any of the other presidents who used one?  what's funny is the "outrage" the rt. wingnuts show over things done/used by every potus. that's funny. rt.wingnut outrage... it shows at the strangest times. only when it's a democrat. that sure does seem hypocritical.

___________________________________________

Its not the teleprompter use I'm referring to, its when he is deprived of its use, and his true intellect, or rather, lack thereof shines thru.  Reading comprehension, please!

---------------------------------------------------------------
 
Originally Posted by direstraits:
.  Dems jest at Bush's speeches, but ignore someone who has an extremely deficient knowledge of geography and commits flubbermouth when deprived of his electronic assistant.

 

if you're not "referring to the teleprompter".... someone is using your account again. you seem to be having lots of trouble with that, lately!

Originally Posted by seeweed:
Originally Posted by direstraits:
Originally Posted by Quaildog:

at a bankruptcy auction the mortgage company stands to lose more.

_________________

Yes, however, if no bankruptcy, the city may find itself saddled with the debt, if it claims the property.

==========

Ok, I'm coming off the cuff here as I am not a lawyer, and it's been a really long time since I took 7th grade Civics, but I tend to think that when a property is seized for "eminent domain ", whomever the property is seized FROM is paid what is deemed to be the "fair market value" of that property at that time, not what is owed on it, not what the owner thinks (like the recent case here on Wilson Dam Road) , but fair market value. Now, the owner is free to challenge that amt in court, but that does not mean they will get more.

 

Therefore, if the city does manage to acquire these houses via eminent domain  at fair market value, and then turn around an do whatever they want to with them, the city is not liable for however much the banks originally loaned on them. That loss , will be to the bank's stockholders.

 

++++++++++++++++++++++++++++++

The key is "If the companies refuse, the city will use eminent domain to seize the mortgages. Refinancing will then be offered to homeowners via a contract the city has with Mortgage Resolution Partners, a private investment firm in San Francisco. After refinancing for a price that’s close to market value, residents will suddenly have a small amount of equity in their homes rather than being tens of thousands of dollars underwater–plus, the city can stop a persistent hollowing out of its population."

 

Ownership of the property deed probably could be claimed from homeowner to the city, then passed back to the homeowner.  However, the amount owed by the original holder of the mortgage is not dismissed. 

Originally Posted by Crash.Override:
Originally Posted by direstraits:
Originally Posted by Crash.Override:

wow! back to the "teleprompter" story... i'm sure you never had a problem with any of the other presidents who used one?  what's funny is the "outrage" the rt. wingnuts show over things done/used by every potus. that's funny. rt.wingnut outrage... it shows at the strangest times. only when it's a democrat. that sure does seem hypocritical.

___________________________________________

Its not the teleprompter use I'm referring to, its when he is deprived of its use, and his true intellect, or rather, lack thereof shines thru.  Reading comprehension, please!

---------------------------------------------------------------
 
Originally Posted by direstraits:
.  Dems jest at Bush's speeches, but ignore someone who has an extremely deficient knowledge of geography and commits flubbermouth when deprived of his electronic assistant.

 

if you're not "referring to the teleprompter".... someone is using your account again. you seem to be having lots of trouble with that, lately!

___________________
What part of "deprived of his teleprompter" don't you understand.  Obama does fine when supporter by TOTUS.  Its when he doesn't have TOTUS and has to wing it, that his innate intellect is revealed, or rather lack, thereof. 

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