Now this is radical socialism

[Spamature]

But it might just be the answer

Desperate for a way out of a housing collapse that has crippled the region, officials in San Bernardino County … are exploring a drastic option — using eminent domain to buy up mortgages for homes that are underwater.

Then, the idea goes, the county could cut the mortgages to the current value of the homes and resell the mortgages to a private investment firm, which would allow homeowners to lower their monthly payments and hang onto their property.


http://www.rollingstone.com/politic...e-a-serious-challenge-to-wall-street-20120720

 

[Greenridgeman]

Of course, San Berdoo has the money to do this, right?

 

[Spamature]

Of course, San Berdoo has the money to do this, right?

They will once they sell the houses

 

[Greenridgeman]

They have to BUY the houses before they SELL the houses.

Who would lend them the money?

 

[OldGaffer]

They have to BUY the houses before they SELL the houses.

Who would lend them the money?

Bad idea, let em all get repossessed and the owners file bankruptcy, that is the way Real Americans do it.

 

[LeRoy_Was_Here]

There was actually an editorial in The Wall Street Journal about a year ago, that suggested we should dynamite one or two million empty homes in the country. Yeah, that would solve the problem.

 

[Greenridgeman]

Have you seen the condition of some of these abandoned homes.

BTW, that is exactly what is happening in Detroit.

Well,not literally dynamiting them, but bulldozing and clearing them.

 

[Spamature]

They have to BUY the houses before they SELL the houses.

Who would lend them the money?

From the article:


Here’s how it works:

MRP helps raise the capital a town or a county would need to essentially “buy” seized home loans from the banks and the bondholders (remember, to use eminent domain to seize property, governments must give the owners “reasonable compensation,” often interpreted as fair current market value).

Once the town or county seizes the loan, it would then be owned by a legal entity set up by the local government – San Bernardino, for instance, has set up a JPA, or Joint Powers Authority, to manage the loans.

At that point, the JPA is simply the new owner of the loan. It would then approach the homeowner with a choice. If, for some crazy reason, the homeowner likes the current situation, he can simply keep making his same inflated payments to the JPA. Not that this is likely, but the idea here is that nobody would force homeowners to do anything.

On the other hand, the town can also offer to help the homeowner find new financing. In conjunction with companies like MRP (and the copycat firms like it that would inevitably spring up), the counties and towns would arrange for private lenders to enter the picture, and help homeowners essentially buy back his own house, only at a current market price. Just like that, the homeowner is no longer underwater and threatened with foreclosure.

 

[Greenridgeman]

BTW, it is called urban renewal, and happens all the time.

 

[Greenridgeman]

I have another question: When does a "homeowner" own the home, when he signs a contract putting him hopelessly in debt he can never pay, or, when he pays the last note?

 

[Spamature]

I have another question: When does a "homeowner" own the home, when he signs a contract putting him hopelessly in debt he can never pay, or, when he pays the last note?

Why does anyone ever go forth with a bad idea ? Why aren't we all geniuses who never do dumb shit.

 

[LeRoy_Was_Here]

Urban renewal is one thing. Dynamiting one to two million empty homes (presumably in less than a year) is something America has NEVER done before, which is why the proposal was so radical. But the very fact that the proposal was made shows how truly crazy America's housing bubble was, during the 2000s---the decade I like to call 'the Naughties'.