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the non-bank, private, unregulated lenders who overwhelmingly fueled the sub-prime bubble.
ing unbelievable. The homeowner buys a house for $500,000 and agrees to pay the en y that loaned him the $500,000 to buy the house X amount of money a month for Y amount of years. The real estate market goes to and his $500,000 house is now worth $350,000, but his note is exactly the same as it always was...X amount a month. Now the homeowner decides that it's not in his best interest to keep paying on the $500,000 loan. He calls the county and the county SEIZES THE MORTGAGE from the borrower and then restructures the loan to the same homeowner for $350,000 the gives it back to the original lender giving the lender a $150,000 haircut...and this only applies to PRIVATE lenders...Fannie and Freddy loans get a pass
http://www.latimes.com/business/la-f...,7268655.story
San Bernardino County weighs eminent domain to fight foreclosures
The county, along with Ontario and Fontana, wants to use eminent domain to seize underwater mortgages from investors and restructure them to help borrowers keep the homes.
By Alejandro Lazo, Los Angeles Times
July 6, 2012, 5:00 a.m.
A plan by San Bernardino County to seize mortgages and restructure them for underwater homeowners using eminent domain is perhaps the most aggressive example of how local governments are seeking new ways to combat foreclosure.
The cities of Ontario and Fontana are partnering with the county to create a Homeownership Protection Program that would use private funds to acquire underwater mortgages from investors. The county and the two cities have created a joint authority to explore and possibly enact the plan, and the first public meeting of that authority will be held next week.
David Wert, a spokesman for the county, said the program is worth exploring because it could offer a solution to one of the region's most entrenched problems: the vast number of loans that are stuck underwater, with more money owed than the property is worth. If the program were to go countywide, it could benefit 20,000 to 30,000 homeowners, he said.
"The only thing we are doing at this point is conducting a conversation," Wert said. "But the reason the county is interested in talking about this is because this is a proposal that could — if everything checks out — address the problem on a fairly large scale."
Although still in its initial stages, the aggressive proposal has attracted controversy. A number of banking, financial and business groups oppose it, contending that seizing mortgages would raise cons utional issues and could increase lending costs in those cities.
The California Mortgage Bankers Assn., the American Bankers Assn. and the American Securitziation Forum, along with several other financial groups, sent a letter of opposition to the county and the two cities.
"We believe that the contemplated use of eminent domain raises very serious legal and cons utional issues," the letter read. "It would also be immensely destructive to U.S. mortgage markets by undermining the sanc y of the contractual relationship between a borrower and creditor, and similarly undermining existing securitization transactions."
Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said the program also could hurt the local housing market.
"It could be devastating," Hobbs said. "If investors are unsure as to the disposition of mortgages in San Bernardino County and in Fontana and Ontario, it could really curtail lending in the area, and if not curtail, certainly increase costs for new loans."
San Bernardino County's plan is the latest of several measures by local governments to fight foreclosures and the problems often associated with resulting neglect: crime and blight.
Chicago passed an ordinance last year that requires banks and other financial ins utions to maintain vacant properties that have been foreclosed upon.
Oakland has ins uted a blight program that would require banks to register, inspect and maintain homes that are in foreclosure. Cleveland has been using a land bank program to tear down foreclosed homes.
Legal experts said the San Bernardino County proposal was one of the first initiatives to try to strike at the problem before a home is in the foreclosure process.
At this point in the planning, only homeowners who are current on their mortgage payments would be allowed to participate in the program, which would target mortgages that have been securitized and sold to private investors. That would exclude loans owned or backed by mortgage ans Fannie Mae and Freddie Mac. The acquired loans would be restructured, lowering the amount owed, with the intent of helping the owner keep the home.
The plan was first proposed to the county by a San Francisco firm named Mortgage Resolution Partners. The firm has employed investment banks Evercore Partners and Westwood Capital to raise money for the initiative from private investors.
Kurt Eggert, a professor of law at Chapman University, said a sticking point could be whether the investors are able to make a profit on the transactions. He said he liked that the plan, unlike efforts elsewhere, was an attempt to get ahead of the problem.
"The alternatives too often are just cities cleaning up afterward, and getting stuck with the mess, and getting stuck with the foreclosures and the abandoned buildings," he said. "It is good to see cities trying to do something proactive."
Cornell Law Professor Robert C. Hockett advised Mortgage Resolution Partners on the design of the proposal. The initiative should pass muster in courts because they have had a long tradition of upholding cities' eminent domain powers as long as the valuation methods used to acquire properties are sound, Hockett said.
It particularly makes sense to use eminent domain to seize underwater mortgages that have been securitized, he said, because often those mortgages can't be sold at market value for legal reasons. Often, those loans must be sold at face value — a higher price — because of the contracts governing them, he said.
"The fact they can't be marketed is the reason we are using eminent domain," Hockett said. "This is actually a pro-market solution."
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the non-bank, private, unregulated lenders who overwhelmingly fueled the sub-prime bubble.
you commies.
Uhhm Mr. Cowboy Sir…This plan was presented by John McCain during the Republican debates….
That's a ing lie. Fannie and Freddie were right the with their heads in the trough.
Also I am pretty sure that you can almost buy the whole town of San Burdu for ˝ a million…
F&F did play catch up, but private lenders, Countrywide, etc, etc were WAY OUT FRONT in the lending, and then selling the toxic to F&F
Obama on mortgage bail out...(Looking for a MCCain link)
http://www.youtube.com/watch?v=qcDgtlbnIaI
There is no ing way this is cons utional under the takings clause.
government seizure of private property. nice.
What is even scarier are the ones in here that agree with it.
government seizes property by the Ms in foreclosures in support of lenders.
God damn you are one ed up whacko.
Nothing ed up about not wanting to bow down to the banks.
Wait till they start whining when the evil bankers won't fund mortgages in counties that steal from them.
Yeah - let me know when that happens. Empty threats are empty.
If the financial crisis taught me anything, its that mortgage lenders really do analyze risk before giving out those loans. They're probably all running scared to get out of the market as we type.
Of course CC is concerned about the bank. Where were the commie calls when the government intervened to give them all that capital so they could remain solvent?
When government helps business consortiums that is cool. When they help a consumer it's communism.
Got it.
The evil bankers didn't make those people go out and find a house they wanted to buy at a price they agreed to pay. The people then asked those evil bankers to loan them the money to buy the house and agreed to pay X amount of money for Y years in exchange for the loan. They were happy to pay X amount of money a month three years ago and can still afford to pay X amount of money every month now. It's not like the evil bankers tried to raise their monthly payment. They just decided they made a bad investment and want their government to steal from the evil bankers to make their investment better.
They also paid the loans back. Bad analogy.
Of course CC is concerned about the bank. Where were the commie calls when the government intervened to give them all that capital so they could remain solvent?
When government helps business consortiums that is cool. When they help a consumer it's communism.
Got it.
yeah i'm against the banks privately funding terrorist groups and globalist organizations, but to get all pissy about them loaning money to you on terms that YOU agree to is crazy talk. some of you guys really are liberty hating psychopaths, this forum is a scary representation of what america on a larger scale has become.
The evil bankers have certainly made many fraudulent mistakes that have been do ented. Not sure who you're going to fool acting as though they're being fleeced while remaining innocent but you're more than welcome to try.
I have just gone through a refi on my house and it was excruciating. The underwriter at Fannie even refused the appraisal on my house and cut it by $35,000 even though we had good comps and my property had very valuable additions (well, barn, riding arena, etc.) that the comps didn't.
Good to see the locked the barn long after the horse left.
Some did. Most didn't. Last I checked it was still $120b in the hole with guys like JP Morgan still owing billions.
http://www.forbes.com/sites/halahtou...tarp-watchdog/
That particular report goes on to talk about how they have made billions in profit in their own right. Also note that this is Forbes; we wouldn't want you going red scare on the media outlet as well.For one thing, there are plenty of folks in Washington included the President and Treasury Department who say the bailouts have actually resulted in a profit for the government. Sounds too good to be true doesn’t it? Romero says that’s because it is. “It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost),” the report notes.
Banks sure deserve our support. Your confirmation bias is disturbing.
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