Kalifornia City To Use Eminent Domain To Seize Houses - Redistribute Them To The Poor

[DCal430]

So effectively they issue the securities themselves but the assets are considered bankruptcy remote and are not general corporate obligations. Further, it doesn't appear that the securities are considered government obligations, thus, any ED foreclosure wouldn't be considered ED from the government. I am not a lawyer and still not 100% familiar with agency CMOs but I am familiar with foreclosure of ABS collateral.

I know well about who gets the proceeds. I manage the credit and research for consumer and commercial ABS for PMs of a very large money manager.

The legal owner remains FNMA, the only people the city see are FNMA as the legal owner. So any ED would be considered ED from the government. FNMA has stated this already when cities were planning this, and cities agreed this is true. This is not in dispute by party of relevance.

 

[Jhhnn]

Sounds peachy, except for the fact that the GSE's are not the government. They are privately held corporations with govt support.

The quote from the previous page is merely an assertion w/o a link, as are the various assertions above...

 

[DCal430]

Sounds peachy, except for the fact that the GSE's are not the government. They are privately held corporations with govt support.

The quote from the previous page is merely an assertion w/o a link, as are the various assertions above...

You are wrong, the Federal government took possession of the GSE during the bank bailout. The federal government holds 79.9% of the shares, 100% control over the GSE, and 100% of all dividends are paid to the Federal Government.

 

[Jhhnn]

You are wrong, the Federal government took possession of the GSE during the bank bailout. The federal government holds 79.9% of the shares, 100% control over the GSE, and 100% of all dividends are paid to the Federal Government.

That doesn't make the GSE's "the government". There exists a structural difference.

Still no linkage.

 

[Patranus]

To update this, the city is going through with the proposition.
http://www.sfgate.com/business/article/Richmond-first-to-jump-into-eminent-domain-battle-4695857.php

Pathetic.

MPR pushes program and generates revenue.
Lends exit city cratering real-estate prices.
More home become underwater.
MPR pushes program.
Repeat.

Pretty sad that residences wont be able to sell their homes and exit this madness.

 

[Jhhnn]

To update this, the city is going through with the proposition.
http://www.sfgate.com/business/article/Richmond-first-to-jump-into-eminent-domain-battle-4695857.php

Pathetic.

MPR pushes program and generates revenue.
Lends exit city cratering real-estate prices.
More home become underwater.
MPR pushes program.
Repeat.

Pretty sad that residences wont be able to sell their homes and exit this madness.

Magnificent double speak.

Real Estate prices have already cratered in Richmond, so we can disregard that bit of flimflammery.

Residents already can't sell their homes because of negative equity. Pitch that, too.

More homes underwater doesn't follow, except in a fantasy scenario. Home mortgages refinanced in this fashion will be above water from the start, excellent investment opportunities, a lot safer than the current mortgages outstanding.

Investors get screwed? They already are, given that the ongoing default rate on current underwater mortgages will be horrendous, anyway. This way, they get to write off loss, otherwise, servicers just keep sucking them dry.

That's where all the whining is coming from, anyway, parasitic servicers who created the Loser! mortgage trusts in the first place & now intend to beat as much cash as possible out of investors.

 

[MrColin]

Err you still have to *pay* people when you eminent domain property. Where are they gonna find the money?

*market value*

 

[glenn1]

The city will spend more in legal fees fighting the mortgage holders than they will ever realize in savings for the homeowners or city tax rolls. And will likely lose the case based on Proposition 99.

It doesn't however surprise me that Jhhnn and his ilk support this. For them, it's fuck the rule of law and fairness and do whatever I think helps the "little guy" regardless of the impact to anyone else or easily forseen consequences.

 

[glenn1]

Congress may be stepping in now:

http://www.mortgageorb.com/e107_plugins/content/content.php?content.14111

 

[DCal430]

That doesn't make the GSE's "the government". There exists a structural difference.

Still no linkage.

The GSE liabilities are liabilities of the US Government. By this fact, they are part of the government, since they are an obligation of the government. That is another reason ED cannot be used here, as it would rob tax payers of their money.

 

[Jhhnn]

The GSE liabilities are liabilities of the US Government. By this fact, they are part of the government, since they are an obligation of the government. That is another reason ED cannot be used here, as it would rob tax payers of their money.

That's not necessarily true at all. Given the extremely high default rate on the existing notes & servicers' penchant for feeding on the trusts like vampires, the taxpayers might save money when we look just beyond the end of our noses. Half a loaf might be more than what servicers leave behind.

So far, Richmond has only approached white label trusts, anyway- you know, the guys with the notes that even Wall St Banksters couldn't pass off on the GSE's.

This really isn't about anything other than protecting servicers' interests, near as I can tell.

 

[DCal430]

That's not necessarily true at all. Given the extremely high default rate on the existing notes & servicers' penchant for feeding on the trusts like vampires, the taxpayers might save money when we look just beyond the end of our noses. Half a loaf might be more than what servicers leave behind.

So far, Richmond has only approached white label trusts, anyway- you know, the guys with the notes that even Wall St Banksters couldn't pass off on the GSE's.

This really isn't about anything other than protecting servicers' interests, near as I can tell.

If they take any property guaranteed and legally owned by the GSE, the investors won't lose any money at all. The only people who will be out will be the tax payers which has to pay for them. The investors won't even notice, the only people who will notice are the tax payers.

Servicers are just people who service the loan, they have no claim to the loan, nor do they get any money from a default. In fact it is often in the servicers best interest to not foreclose, because for FHA loans, they must make actual owner of the note whole, while they themselves are not made 100% whole. This is one of the reason who servicing fees on FHA loans are much higher, than conventional loans.

 

[piasabird]

I think too much urban sprawl and too many houses can be a bad thing. In Asia they tend to just build Apartments like 5-15 stories high or higher. In some places they heat all the apartments with a central heating plant that heats up multiple Apartment Buildings. This is to preserve gound for farming and other uses. I think LA should probably think about how high they could build seeing all the damage that can result due to an earthquake.

 

[Patranus]

I think too much urban sprawl and too many houses can be a bad thing. In Asia they tend to just build Apartments like 5-15 stories high or higher. In some places they heat all the apartments with a central heating plant that heats up multiple Apartment Buildings. This is to preserve gound for farming and other uses. I think LA should probably think about how high they could build seeing all the damage that can result due to an earthquake.

In the Bay Area UN Agenda 21 AKA California SB 735 AKA Bay Area One is already doing that by mandating 'stack and pack' housing in the name of 'social' and 'economic' justice.

Its funny because people bitch and moan here about cost of housing yet it is not the cost of housing which is high, it the cost of single family housing which is high and that is a direct result of progressive policies which hinder the development of single family homes. Multi family is plenty affordable but for some reason the progressives don't like a dose of their own medicine.

 

[JTsyo]

I would very much enjoy any government official attempt to seize my property........

I highly doubt that.

 

[JulesMaximus]

Won't someone think of the poor greedy private investors?

 

[piasabird]

I dont think governments should be able to seize personal property through emminent domain unless it is for a specific purpose like building a road or a school or a library or something like that. The right to own property is a crucial premise of Democracy. However, this could be used as a way for the homeowner not to face a foreclosure. Most people are foreclosed on because they are deadbeats who shouldnt have been able to purchase the property to begin with. This kind of a plan could be used to converty housing over to a lower rent controlled housing unit. For someone with an acutal job who could afford and appreciate a place to live.

This is all probably doomed to failure. Just force developors to pay taxes or tare down the building. If a bank does a repossession make them pay for an alarm system and security and make them pay to maintain the property or condemn the property and then seize it. Then build a few apartment buildings. Also make every housing development also build a few apartment buildings or 2 or 3 family units.

Land for housing is scarce and building large houses is kind of wasteful and greedy. Low income people and people on SS also need a place to live.

 

[poofyhairguy]

I think this is a great idea. Support for these sorts of anti-business plans (because this will raise the cost of real estate lending for everyone in that area including businesses) will continue to drive businesses away from California and towards Texas.

Since I want my property value in Texas to increase, and that depends on a strong economy, I am happy to see the only western state than can really compete with Texas regulate itself into being a shithole.

Of course the Californians won't see this unintended consequence until its too late, and then complain that businesses are "just being greedy" when their actions have consequences. But by then it will be too late, the jobs will be gone.

In 21st century America its survival of the fittest, right down to the state level. Who I feel bad for is these upside down home owners. Having the government fix your mistake sounds good until you can't get a decent job to pay for your new communist mortgage.

 

[bshole]

Since I want my property value in Texas to increase, and that depends on a strong economy, I am happy to see the only western state than can really compete with Texas regulate itself into being a shithole.

I see that you like paying property taxes. I love when the city tells me the value of my property has doubled and then use it as a justification to rape me with a massive new tax increase. Seriously dude, the only time that raising property values rising helps is when you go to sell, it sucks for buyers and tax payers....

 

[poofyhairguy]

I see that you like paying property taxes. I love when the city tells me the value of my property has doubled and then use it as a justification to rape me with a massive new tax increase. Seriously dude, the only time that raising property values rising helps is when you go to sell, it sucks for buyers and tax payers....

I don't like having to pay taxes, but I like that my local economy is doing good.

My home isn't worth a ton (so any increases can't be that much) and if I change jobs I will probably have to sell. So I will take paying extra to be able to get out whenever I need to and not be upside down.

 

[bshole]

I don't like having to pay taxes, but I like that my local economy is doing good.

My home isn't worth a ton (so any increases can't be that much) and if I change jobs I will probably have to sell. So I will take paying extra to be able to get out whenever I need to and not be upside down.

I dunno. My home property taxes are $500/month. My land property taxes went from $200/year to $2800/year (in 20 years). I didn't buy the land as an investment, I bought it for recreation. I would rather the land be worth what I paid for it and pay $200/yr in taxes.

 

[poofyhairguy]

I dunno. My home property taxes are $500/month. My land property taxes went from $200/year to $2800/year (in 20 years). I didn't buy the land as an investment, I bought it for recreation. I would rather the land be worth what I paid for it and pay $200/yr in taxes.

I am in a modest house (right under the local average) and I pay 4k. It went up $97 this year and I expect more next year. I don't want to pay that, but I'd rather pay that then a state income tax or higher sales tax.

One thing for me is that I am in an area with not many jobs in my industry. I would have to move to switch jobs, which is the plan in a few years.

 

[Jhhnn]

I think this is a great idea. Support for these sorts of anti-business plans (because this will raise the cost of real estate lending for everyone in that area

Why would it? I mean, really, not just in terms of repeating something you read.

MRP clearly isn't having difficulty finding investors, and the risk on these new mortgages is obviously less than on existing notes.

 

[Jhhnn]

If they take any property guaranteed and legally owned by the GSE, the investors won't lose any money at all. The only people who will be out will be the tax payers which has to pay for them. The investors won't even notice, the only people who will notice are the tax payers.

Servicers are just people who service the loan, they have no claim to the loan, nor do they get any money from a default. In fact it is often in the servicers best interest to not foreclose, because for FHA loans, they must make actual owner of the note whole, while they themselves are not made 100% whole. This is one of the reason who servicing fees on FHA loans are much higher, than conventional loans.

None of that contradicts what I said.

Servicers do great from defaults, not necessarily from actually foreclosing. There is a difference. Late fees go to the servicer, and are drawn from the mortgage pool's revenues. So the longer they can put off liquidating that property through foreclosure, the more they make from simply sending out computer generated form letters to the owner. And, of course, the longer a property stands vacant, the more likely it is to deteriorate. The worse that gets, the less likely the servicer is to foreclose at all, much preferring to collect late fees as long as possible.

It's still on the books, so Ka-ching!

When that gets worn out & the place is a wreck, foreclosure finally occurs. Title is usually transferred at a pittance to investors who simply hold the property long term, sometimes as a tax deduction. Richmond & other communities suffer as a result-

http://www.nytimes.com/2011/10/28/u...-abandoned-buildings.html?pagewanted=all&_r=0

It's just another form of looting.