More Cities Consider Eminent Domain to Halt Foreclosures

Save our Homes Walk LogoThe failure of the U.S. government to prosecute those who were the masterminds behind the NTMs (nontraditional mortgages) and subprime loan debacle, that more likely appear to have been an intentional Ponzi-like scam, makes Eminent Domain a plausible solution for relief. If handled properly Eminent Domain may actually save homes and families – not to mention saving lives and local governments that foolishly invested in unregulated and rigged derivatives and securities.

Do the math.  Hypothetical figure (conservative): $900 month payments X 67 million MERS mortgages X 12 months (1 yr.) = $723,600,000,000 new revenue stream annually – and this figure is conservative… it’s likely 2-3 times higher and this is JUST MERS.

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Published: November 15, 2013
17mayorwaynesmith_thumbOn Saturday, Mayor Wayne Smith of Irvington, N.J., will announce that his mostly working-class city is proceeding with a legal study of the plan. Irvington could try to head off legal action and repercussions through what are called “friendly condemnations,” in which incentives are used to persuade the owner to drop any objections, he said. “We figure if this program works it can help anywhere from 500 to 1,000 homes.” [Bravo! Mayor Smith – more politicians should have your testicular fortitude and common sense – not to mention compassion and ethics! DC Ed.]

This summer the similarly working-class city of Richmond, Calif., in a heavily industrial part of the San Francisco Bay Area, became the first to identify homes worth far less than their owners owe, and offer to buy not the houses themselves, but the mortgages. The city intends to reduce the debt on those mortgages, saying that will prevent foreclosure, blight and falling property values. If the owners of the mortgages — mostly banks and investors — balk, the letters said, the city could use eminent domain to condemn and buy them.

Since then, intense pressure from Wall Street and real estate interests, including warnings that mortgages will become difficult or impossible for Richmond residents to get, has whittled away support for the plan. The city has yet to actually use its power of eminent domain, but it is already fighting two lawsuits filed in federal courts.

Still, cities hard hit by the housing crash are showing interest. Yonkers, just north of New York City, will soon take up a resolution to study the use of eminent domain to reduce debt, and support is building in Newark as well. In California, Pomona and Oakland are moving forward.

Eminent domain Hockett“Things seem to be picking up steam in Minnesota, and I’ve just been contacted in the past couple of weeks by two cities in Pennsylvania as well,” said Robert Hockett, a Cornell University law professor and one of the architects of the strategy. Nationally, housing prices have begun to recover, but about one in five homeowners still owes more than the home is worth, and in cities like Richmond as many as half do.

Several local governments that have considered the plan eventually backed away, including San Bernardino County and North Las Vegas. But, Mr. Hockett said, “We’re moving into a kind of second generation of municipal interest that is more hard core — it’s interest with a spine, so to speak.”

The cities are all still in the early stages of considering the plan.

In New Jersey, the American Civil Liberties Union has also joined the effort, saying that opponents are using threats to keep cities from exercising their legal right to employ eminent domain.

Opponents of the strategy, including the institutional investors BlackRock and Pimco, Wells Fargo and the Mortgage Bankers Association, say that taking mortgages by eminent domain is a breach of individual rights and that investors will not receive fair market value for the mortgages. In Richmond, Mayor Gayle McLaughlin has asked investors to come to the table to work out a price, but they have so far declined to negotiate.

on borrowed timeThe Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac and controls most mortgages in the country, has said that the eminent domain strategy is “a clear threat to the safe and sound operations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks” and that it may take legal action against cities that use it or limit mortgage activity there. In Congress, a housing finance bill by Jeb Hensarling, a Texas Republican and chairman of the Committee on Financial Services, would effectively end mortgage financing in cities that used eminent domain. [And let’s face it, Fannie and Freddie were at the helm of the financial force majeure. Their officers helped organize Mortgage Electronic Registration Systems, Inc. (Paul Mullings, VP) and the MERS Blur gang – and no one has been held accountable for the debacle and failure to enforce oversight in the mortgage industry as it paper-raped America. DC Ed.]

On Friday, letters signed by 10 Democratic members of Congress were expected to be sent to Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, and Shaun Donovan, secretary of housing and urban development, saying that any policies that restrict mortgage lending in areas that use eminent domain would violate anti-discrimination laws.

brando“We write to express our disappointment that the Federal Housing Finance Agency is actively supporting and threatening legal action against communities which consider exercising their legal rights to use eminent domain to help struggling homeowners,” the letter to Mr. DeMarco said. [DeMarco is out of control. DC Ed.]

 Read more HERE in The New YorkTimes

Related DeadlyClear posts:

…there was no next time

U.S. Is Set to Sue a Dozen Big Banks Over Mortgages – Yeah, sure.

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9 thoughts on “More Cities Consider Eminent Domain to Halt Foreclosures

  1. My feelings on this is when the cities attempt eminent domain they will follow the money and find the truth of the scam and the missing authentic notes, The Fannie and Freddie shell game whom failed to secularize anything. The Ponzie scheme will be peeled right open and that is what scares Freddie Fannie and all the big con artist stealing houses. The truth about the trust being violated will come forward to the cities that invested in them. I can see the fleet of lawsuits now! With tax funds for the law suits unlike the homeowners who struggle to litigate or walk away with no hope because they have been forsaken.

  2. There needs to be some heads rolling! I have never in my life time seen such blatant disregard for the law..I guess there are those truly above the law and untouchable! The Evidence against these Too Big to Fail Banks will see the light of day! I just hope it is in my life time..

  3. To pre-empt local governments, three Republican congressmen from California last month sent a letter to Housing and Urban Development Secretary Shaun Donovan on behalf of the industry, asking HUD to deny FHA financing from mortgages taken by eminent domain. Last year the financial, real estate and insurance industry topped the list of contributors to all three politicians — Gary Miller ($366,000), John Campbell ($484,000), and Ed Royce ($1 million) — according to OpenSecrets.org .

  4. Pingback: Richmond, CA Threatens Eminent Domain To Address Foreclosure Cri | Deadly Clear

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