Exclusive: Investors tout controversial "condemnation" for housing fix

Sounds like rewarding stupidity. People need to face the consequences for their actions. That is what foreclosure is for.

You have to wonder how much money these investors stand to make. They’re not running charities.

What nonsense! The people who lent the money foolishly, or bought garbage loans from untrustworthy vendors (and if someone sold a bad mortgage they are obviously untrustworthy), should take the hit, not the taxpayers.

How about requiring mortgage loans to not exceed tax appraisals as of a particular date, and involuntarily decreasing the amounts that can be legally recovered? In other words, force financial institutions to swallow the results of their bad decisions and reset mortgage amounts. If any institutions go under, let them go! No government agency insures my own investments against loss. The country would be better off without bad banks.

But sticking the taxpayer with yet more losses to cover aristocrats’ bad decisions is unthinkable. More than enough already.

I’m underwater on my current mortgage, but I keep making the payments because I gave my word (signed) to the lender. If the lenders can be forced to write down underwater mortgages, then you all shouldn’t mind writing down any appreciation of a mortgage, right?

So let me understand something: If a house value goes UP during the term of the mortgage, the homeowner gets all the appreciation; but if the house goes down in value, the lender takes the loss, with NO deleterious effects to the borrower’s credit history? So “heads the borrower wins, tails the lender loses”? Is that it?

Expect any county which does this to have a very hard time getting any lender to underwrite new mortgages in that county. And the few lenders who do go in will charge a very high interest rate.

AZWarrior, I agree with you and I feel the same way. I set out to pay this thing off and I will or die tryin’. Truth be told, you entered into a BUSINESS CONTRACT with someome who would profit quite handily should you complete the mission. That profit comes (as most does) by ASSUMING RISK. For that risk, they make money. The possibility of default is part of the deal. I think if you look at the statistics, you’ll find most of the defaults are NOT from the naive worker bees like you and me but by those who are quite high up on the economic ladder and understand that “there is no moral imperative, only the business imperitive”. Those are the one’s who default/declare bankruptcy not out of destitution, but out of “what makes the most business sense”. Again, I’m un/der employed, my house is ridiculously under water, but I will continue on. Why? Because I’m a worker bee. It’s what I do.

@usagadfly really needs to learn reading comprehension. There won’t be ANY cost to taxpayers as private capital is used to payoff the existing mortgages at “fair market value”. Of course he MIGHT be thinking that nothing goes as planned and the taxpayer gets stuffed in the end.

I’m very uncomfortable with this use of eminent domain to force a financial transaction. This isn’t condemning property for public works or even the questionable “blighted areas” that’s been used to eliminate neighborhoods for commercial businesses (New London, CT). This is a third party (local govt) forcing a transaction between the first two parties (lender and borrower) for (in part) the benefit of a fourth party, the new investor that wouldn’t do this without some benefit.

It also seems to make the assumption that these houses will be rented once the mortgage is paid off and the new financial institution owns the property. Expensive locales such as CA might find that once relieved of the mortgage burden that many now ex-homeowners might pull up stakes and move somewhere cheaper, especially if they’re having trouble finding work. Then they’ll have housing graveyards which isn’t any better.

Then there’s the question of how this would work in inner city areas. These new lenders would probably stick to suburban areas with a greater chance of recovery than inner city neighborhoods. How long before we hear cries about racism and redlining.

did you catch the phrase ” Common Good”.. who are these unidentified investors, how does a local government obtain authority to declare properties Condemned just on their own whim? this sint about refinancing or saving the mortgage/housing sector and economy. this is an attempt to push the limits of power!! automatic condemnation of property and the theft of wealth is whats going on here. private property is being attacked by the left wing!!! anybody that lobbies for this is insane. the article states its backed by private investment, and the tax payers are not on the hook… but what happens to the homeowner? how will their recent loss of stolen property affect their ability to refinance? this is a consolidation of property attempts by somebody… who are these Entities? leftists, with more grander goals than just saving a few mortgages… becareful how this plays out!! watch this story develop!!

You don’t dive in the deep end if you can’t swim.

When so much is going on without public knowledge and disclosure, one has to sound out the alerts. People deserve to know. I wonder what the banks will actually say or do once they find out that performing loans are the only loans that will qualify for this program I’m told by reliable sources. This is insanity with greed once again.