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Is fun comparing two of the arguments being put forward by the bank people here - "The banks argue the plan would "severely disrupt the United States mortgage
by moocowduckquack 13y ago
Is fun comparing two of the arguments being put forward by the bank people here -
"The banks argue the plan would "severely disrupt the United States mortgage industry" because many other cities would likely adopt the same program to help homeowners who owe more on their mortgages than their houses are worth."
and -
"Cameron said pension funds, banks and other groups that made loans in Richmond stand to lose millions if the city is allowed to use eminent domain to force lenders into accepting less than the original terms of the loan.
He also predicted that cities using eminent domain will make lenders wary of doing business there.
"There's a domino effect in play here," he said."
If many other cities decide to do this, then the financial services industry is not going to be able to avoid doing business in those cities. One or two cities maybe, but not if many cities do this.
The financial services industry is always fond of threatening that it is going to take its ball and go home if it doesn't like the decisions being made, but really it can't actually afford to.
- hga 13y agoWhy ever would they play a game that's rigged for them to lose? Who can afford to go into deals knowing they'll lose money? How will they explain that to their investors?
- moocowduckquack 13y agoThey aren't losing money. The sales price of a home after foreclosure is usually much lower than it's valuation before foreclosure. Over the short term they will make more money. They are losing the option to make even more money in the future however, assuming that over a long enough timeline the price will go back up when the economy recovers. I am not sure that the way that this is being done is sensible, however I do not think that it will drive business from the city, at least not in comparison to a housing crisis.