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From an Unlikely Source, a Serious Challenge to Wall Street

7 points by rosser 14y ago

DamnYuppie 14y ago
While I am not a big fan of how imminent domain has been used in the past this idea actually seems, at first glance, to be a creative use of it to do an end around the big banks. I am skeptical but, at the same time, hopeful this plan can work and isn't just another way for financiers to screw over the average joe. I guess that goes to show how little trust I have in banks and public officials :(
noonespecial 14y ago
I'm not quite sure how this works. So the house is seized via eminent(1) domain and the low fair market prince is paid. Is this not paid to the owner, who then still owes the bank the extra he overpaid for the house during the bubble? How will it help that the government sells back the house him at the new market rate if he's still bankrupted trying to settle the old loan? It seems to me this just makes it all worse by bankrupting everyone who's underwater all at once. (1)eminent = everywhere (our domain is everywhere), imminent = ready to take place.
- prodigal_erik 14y ago
  Yikes, I wonder if an eminent domain seizure would let the lender demand the balance from the owner even where the mortgage would have been non-recourse after a foreclosure. I'm not a lawyer but I guess it was already pretty common for California homeowners to lose their non-recourse status by refinancing.
- antidoh 14y ago
  "Here’s how it works: MRP helps raise the capital a town or a county would need to essentially “buy” seized home loans from the banks and the bondholders (remember, to use eminent domain to seize property, governments must give the owners “reasonable compensation,” often interpreted as fair current market value)." The government is seizing the loan.
pasbesoin 14y ago
Ownership is -- remains -- a social contract. Push it too far, and society will break the contract. Put simply, you'll no longer be seen to be acting in society's interest, which is about where your ownership -- absent the ability to muster brute force -- ends.

7 points by rosser 14y ago

While I am not a big fan of how imminent domain has been used in the past this idea actually seems, at first glance, to be a creative use of it to do an end around the big banks. I am skeptical but, at the same time, hopeful this plan can work and isn't just another way for financiers to screw over the average joe. I guess that goes to show how little trust I have in banks and public officials :(

noonespecial 14y ago

I'm not quite sure how this works. So the house is seized via eminent(1) domain and the low fair market prince is paid. Is this not paid to the owner, who then still owes the bank the extra he overpaid for the house during the bubble? How will it help that the government sells back the house him at the new market rate if he's still bankrupted trying to settle the old loan? It seems to me this just makes it all worse by bankrupting everyone who's underwater all at once. (1)eminent = everywhere (our domain is everywhere), imminent = ready to take place.

prodigal_erik 14y ago
Yikes, I wonder if an eminent domain seizure would let the lender demand the balance from the owner even where the mortgage would have been non-recourse after a foreclosure. I'm not a lawyer but I guess it was already pretty common for California homeowners to lose their non-recourse status by refinancing.
antidoh 14y ago
"Here’s how it works: MRP helps raise the capital a town or a county would need to essentially “buy” seized home loans from the banks and the bondholders (remember, to use eminent domain to seize property, governments must give the owners “reasonable compensation,” often interpreted as fair current market value)." The government is seizing the loan.

pasbesoin 14y ago

Ownership is -- remains -- a social contract. Push it too far, and society will break the contract. Put simply, you'll no longer be seen to be acting in society's interest, which is about where your ownership -- absent the ability to muster brute force -- ends.