Mortgage News Daily
Return to Industry News Index
Return to Industry News Index
New Homes Journal - kc

Home —— Communities —— Builders ——Industry News —— Resources ——

Financing/Insurance —— ProfilesContact Us

 

 

Home —— Communities —— Builders ——Industry News —— Resources ——Financing/Insurance —— ProfilesContact Us

Eminent Domain Issue Should not be Taken Lightly; Investor and Training Updates
by Rob Chrisman
em·i·nent do·main: Noun - "The right of a government or its agent to expropriate private property for public use, with payment of compensation."

It is a dangerous combination: a law firm trying to get some publicity, a city that declared bankruptcy, and public opinion that a) is against mortgage banking, and b) doesn't really understand what this could mean. Recently California made headlines, and the mortgage industry & investors shutter, when eminent domain was discussed as a way to seize mortgages out of pools by San Bernardino.

Typically, eminent domain has been used to clear property for infrastructure projects like highways, schools and sewage plants. But supporters say that giving help to struggling borrowers is also a legitimate use of eminent domain, because it's in the public interest.

Under the proposal, a city or county would sign on as a client of Mortgage Resolution Partners, and then condemn certain mortgages. The mortgages are typically owned by private investors like hedge funds and pension funds. Under eminent domain, the city or county would be required to pay those investors "fair value" for the seized mortgages. So Mortgage Resolution Partners would find private investors to fund that.

Of course, the question is, "What is fair value?"...

read the rest of the article...

mortgage news daiy