05:04:00
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, where local government authorities would "condemn" the underwater home loans and force a refinance.
Is it safe to use eminent domain?
"Eminent domain" is a government power allowing the government to seize land for any reason as long as it is for "public good." It would be considered detrimental to public welfare to do otherwise usually. During this process, the land owner is compensated by the government. This is one power that federal, state and local governments have access too, and it is very debatable.
There are a ton of troubles associated with eminent domain seizures. Even though they are for the common good, such as for highway extensions, people are generally not given what the land is worth from the government. For instance, one landowner in the city of Hoboken was given $2.3 million for an acre of land worth $10 million to make a park, according to New Jersey.com. A lot of people think this is the worst type of abuse of power.
A fantastic way
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 recognized as "condemned." However, MRP wants to use it to condemn the mortgage loans.
One idea that MRP brought up would be to get private investors with a lot of cash to buy the loans from customers, according to Reuters. Then, the house would be seized from banks meaning less would be paid for the house than it is really worth. Then, MRP would sell the loans to brand new investors and lower payments to help the mortgage borrower. This would be a good plan considering 22 percent of the home loans in the country are underwater according to CoreLogic estimates and Zillow estimates that number to be higher at 31.4 percent, according to CNN. These consumers might really appreciate the help.
Since investors would fund the entire action, no taxpayer money would be spent; all any government authorities in California would be doing is turn in the paperwork for eminent domain actions.
Just a proposal for now
MRP has taken the proposal to a ton of local governments in California already, and a lot of people liked the idea 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 home loans, the city council already turned the bill down.
Despite the fact that a lot 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 proprietors are still making payments regularly. It is extremely dangerous for a homeowner to own more than the home is worth because they could end up in foreclosure.
Is it safe to use eminent domain?
"Eminent domain" is a government power allowing the government to seize land for any reason as long as it is for "public good." It would be considered detrimental to public welfare to do otherwise usually. During this process, the land owner is compensated by the government. This is one power that federal, state and local governments have access too, and it is very debatable.
There are a ton of troubles associated with eminent domain seizures. Even though they are for the common good, such as for highway extensions, people are generally not given what the land is worth from the government. For instance, one landowner in the city of Hoboken was given $2.3 million for an acre of land worth $10 million to make a park, according to New Jersey.com. A lot of people think this is the worst type of abuse of power.
A fantastic way
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 recognized as "condemned." However, MRP wants to use it to condemn the mortgage loans.
One idea that MRP brought up would be to get private investors with a lot of cash to buy the loans from customers, according to Reuters. Then, the house would be seized from banks meaning less would be paid for the house than it is really worth. Then, MRP would sell the loans to brand new investors and lower payments to help the mortgage borrower. This would be a good plan considering 22 percent of the home loans in the country are underwater according to CoreLogic estimates and Zillow estimates that number to be higher at 31.4 percent, according to CNN. These consumers might really appreciate the help.
Since investors would fund the entire action, no taxpayer money would be spent; all any government authorities in California would be doing is turn in the paperwork for eminent domain actions.
Just a proposal for now
MRP has taken the proposal to a ton of local governments in California already, and a lot of people liked the idea 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 home loans, the city council already turned the bill down.
Despite the fact that a lot 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 proprietors are still making payments regularly. It is extremely dangerous for a homeowner to own more than the home is worth because they could end up in foreclosure.
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