Posted on 15 July, 2012 | No Comments
News from Boston Herald:
In California, San Bernardino County is considering a dreadful proposal to use the power of eminent domain to buy “underwater” mortgages.
An “underwater” mortgage is one on which the amount owed is more than the property is worth. They bloomed like weeds in the housing crash; every other home in the county, which has more than 2 million residents east of Los Angeles, is said to be under water.
A San Francisco outfit called Mortgage Resolution Partners proposed that the county take the mortgages by eminent domain out of securities in which they have been packaged, rewrite them based on current market value and repackage them into new securities that would be sold with a government guarantee.
This would be an abuse of eminent domain, which is supposed to be reserved for projects of public benefit. It’s doubtful that any court would find public benefit in haphazard refinancing of mortgages on homes where the owners are still current in their payments (by definition the case with underwater mortgages) even though their payments would be lowered.
Besides, the U.S. Constitution forbids states from pa……………. continues on Boston Herald