A California-based mortgage solutions company has a novel concept to control the amount of underwater mortgages. The concept is to use the power of eminent domain, whereby local governments would "condemn" the underwater mortgages and drive a refinance.
Is it secure to use eminent domain?
There is one power that has been debated a lot by the federal, state and local government authorities called "eminent domain." This is the right for the government to compensate any homeowner for loss of property and seize the property as long as it is for "public good," or if it would be detrimental to public welfare to not take the land. This is just one of the many debated government powers.
Eminent domain seizures are generally for things like highway extensions and so forth. For instance, according to NJ.com, the city of Hoboken recently used eminent domain to appropriate a 1-acre parcel of land from a landowner for use as a park, offering the owner $2.3 million despite the land being valued at $10 million. It is highly controversial, as many civil libertarians consider it among the worst abuses of government power.
Try it like this
California-based real estate business Mortgage Resolution Partners, according to Reuters, has a novel concept for using eminent domain. When eminent domain is used, the house is known as "condemned." However, MRP wants to use it to condemn the mortgage loans.
Millions of homeowners are underwater. CoreLogic estimates 22 percent of the nation's mortgages are underwater; Zillow, according to CNN, estimates 31.4 percent of the country's homes are in negative equity. MRP's idea, according to Reuters, is to get private investors to invest the funds needed to seize the loan and pay the bank that owns seized properties a fair market price, which would be lower than the purchase price, for the deeds to said properties. The loans would then be restructured by MRP for a fee and sold to brand new investors, lowering payments for the mortgage borrower.
The action would be financed by investors, which means the only government involvement in California would be to turn in the eminent domain paperwork. There would be no taxpayer dollars used.
Still in the proposal stage
MRP has taken the proposal to a ton of local governments in California already, and many people liked the concept a lot since California could really use a pick-me-up. The Hesperia Star explained that even though 50 percent of homeowners in the city are underwater on their mortgages, the city council already turned the bill down.
Regardless of the fact that a ton of people are underwater, a lot of them are still paying on their payments, according to CNN. The Zillow survey showed that 90 percent of underwater home owners are still making payments regularly. It is very dangerous for a homeowner to own more than the house is worth because they could end up in foreclosure.
Is it secure to use eminent domain?
There is one power that has been debated a lot by the federal, state and local government authorities called "eminent domain." This is the right for the government to compensate any homeowner for loss of property and seize the property as long as it is for "public good," or if it would be detrimental to public welfare to not take the land. This is just one of the many debated government powers.
Eminent domain seizures are generally for things like highway extensions and so forth. For instance, according to NJ.com, the city of Hoboken recently used eminent domain to appropriate a 1-acre parcel of land from a landowner for use as a park, offering the owner $2.3 million despite the land being valued at $10 million. It is highly controversial, as many civil libertarians consider it among the worst abuses of government power.
Try it like this
California-based real estate business Mortgage Resolution Partners, according to Reuters, has a novel concept for using eminent domain. When eminent domain is used, the house is known as "condemned." However, MRP wants to use it to condemn the mortgage loans.
Millions of homeowners are underwater. CoreLogic estimates 22 percent of the nation's mortgages are underwater; Zillow, according to CNN, estimates 31.4 percent of the country's homes are in negative equity. MRP's idea, according to Reuters, is to get private investors to invest the funds needed to seize the loan and pay the bank that owns seized properties a fair market price, which would be lower than the purchase price, for the deeds to said properties. The loans would then be restructured by MRP for a fee and sold to brand new investors, lowering payments for the mortgage borrower.
The action would be financed by investors, which means the only government involvement in California would be to turn in the eminent domain paperwork. There would be no taxpayer dollars used.
Still in the proposal stage
MRP has taken the proposal to a ton of local governments in California already, and many people liked the concept a lot since California could really use a pick-me-up. The Hesperia Star explained that even though 50 percent of homeowners in the city are underwater on their mortgages, the city council already turned the bill down.
Regardless of the fact that a ton of people are underwater, a lot of them are still paying on their payments, according to CNN. The Zillow survey showed that 90 percent of underwater home owners are still making payments regularly. It is very dangerous for a homeowner to own more than the house is worth because they could end up in foreclosure.
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