3 ms·

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

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.