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Government verses foreclosuresUser Forum Topic
Submitted by SD Realtor on January 13, 2009 - 6:20pm
Why not try emminent domain? Cut and pasted from Jim Klinges site. Credit to Jim! Will they just keep coming up with ideas until one works? *********************** From cnbc.com: http://www.cnbc.com/id/28638551 An excerpt: “Taylor and the NCRC are proposing a new government program, using TARP money, whereby the government would “use its power of eminent domain to take troubled properties/loans from mortgage servicers and lenders, so large numbers of loans could be modified, writing down principal and interest rates. The loans would then be re-sold to the private market.” The government would buy these loans at a “steep discount.” Eminent domain allows the government to take an asset where a public purpose is served, and it requires that they pay the investor the “fair market value” for it. NCRC claims the fair market value would be about 30-50 percent of the current loan value. NCRC argues, “Discounting the purchase of these loans would strike a balance between assisting homeowners and ensuring that lenders, servicers and securitizers are not rewarded for financing and servicing predatory and price-inflated loans.” That discounted price would then “be sufficient to write down the loan balance of millions of loans such that they can be permanently refinanced or modified to ensure long-term sustainability.” It’s not too crazy, no? I mean, if you’re of the opinion that these borrowers should in fact be saved and given back home equity that perhaps they gambled on in the first place. The cost, NCRC estimates, $50-$100 billion.” ************* My opinion is that the cost is about 10x to low. However what is the difference between smart piggs like us who held out and are renting, and buyers who overextended and then get the property purchased by the government using emminent domain, then have principal reductions and a loan mod... then get to keep the home with a lower rate and a lower nut... ************* Please pass me the tape so I can wrap it around my head so it does not explode.
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Someone que the lawyers stage right....
XBoxBoy
"Will they just keep coming up with ideas until one works?"
No, they'll keep coming up with ideas that don't work. Government is not a meritocracy. It is a social club where getting the monkey off your back, and on another's, is the game. Ultimately, the taxpayer will be shovelling the monkey doo.
The govt is ultimately us. The seperation is an illusion they've created to make you think you're being "saved" by some benevolent power.
This is just another idea that wont work. In order to maintain any type of free market, they must be very careful with their level of intervention. Otherwise it becomes socialized and that's the death of the market. So they can really only make it look like they're helping.
It’s not too crazy, no? I mean, if you’re of the opinion that these borrowers should in fact be saved and given back home equity that perhaps they gambled on in the first place. The cost, NCRC estimates, $50-$100 billion.”
And what if you're not of that opinion?
What a terrible idea. And what's the banks say in all this? And who will these private equity buyers be? And what about current housing inventory sitting at unaffordable prices?
This is just another thing the Gov't (and short sighted commentators) fails to understand. Forcing reductions in the value of assets discourages future lending for the purchase of those assets.
Everyone wonders why banks won't lend the bailout money...What do you expect when their own money they lent is being written down on a daily basis.
$50-$100 Billion. Sounds like Bernanke.
Insanity.
So they are gonna take the houses by eminant domain, from the owner I assume, or better known here as the FB. The bank will immediatly have to write off the difference between what they are owed, and whatever the government gives them. 30-50% of bank assets (of the newer, more troubled variety that is. I have a feeling that 150k loan from 1985 is rather safe, even now) suddenly go poof? Are our banks strong enough to take those kinda hits? Arn't we trying to save the banking industry already? Wasnt the original point of the TARP to save the banking industry? How ironic would it be if they used banking industry bailout money to bring down the banks!