Sure they would. But perhaps they'd be less keen to jump to foreclose?

danivon wrote:Sure they would. But perhaps they'd be less keen to jump to foreclose?

Anecdotally, they're not so keen to foreclose. I know the foreclosure rate is high, but many of them are put off for months. This is a poor time to foreclose: you get stuck with property that is not easily sold. Banks make lousy real estate companies.

I know of one case, and I'm not intimately following every foreclosure situation, wherein a woman was given 8 months and I don't know if they've ever foreclosed on her. They kept waiting for Obamabucks (seriously).

As I understand this, one of the reasons cities are thinking of this, is because once a defaulting home loses its occupant, it decays quite quickly. As homes in an area are foreclosed upon they have a spiralling effect on values of homes in an area and even more homes go underwater. The bank owners havn't been particularly diligent about keeping homes and especially the gardens in good repair of those homes they've seized. ... The use of eminent domain could be justified by the need to protect the erosion of a neighborhood. Particualrly the loss of populace.... If it protected the tax paying base and the value of property within the city it seems as logical a use of the power as the need for land for a thorough fare... .
.
One of the problems of dealing with banks for mortgage holders is an unequal bargaining position. If the only bargaining weapon for a home owner is walking away from a mortgae thats not much. Especially where they can't by law actually avoid the ongoing debt.
What the use of eminent domain might do is encourage banks to refinance based on realistic values, and to forgive money that they will probably lose over time anyway....
All things being said, if eminent domain was only used against banks that had "behaved badly", that is participated in some of the practices that created the housing bubble, I'd bet almost everyone could be indicted Fate....And if the towns took this step to qualify who'd they use the eminent domain upon - and only used it upon those who could be indicted would you support it?

It seems to me that the only stake holders in the housing bubble who havn't been compensated for the failure of deregulation are the home owners. Maybe some don't derserve help. But until those underwater are given relief the economy will not be made whole. Bank profits are back to record levels....... maybe its time that banks did contribute for the handout taxpayers have given them? If eminent domain forces the issue ...maybe its not so bad,.

rickyp wrote:It seems to me that the only stake holders in the housing bubble who havn't been compensated for the failure of deregulation are the home owners. Maybe some don't derserve help. But until those underwater are given relief the economy will not be made whole.

As is often the case, I fit into this category. I decline Federal help.

And, in fact, if everyone in my situation takes it, we will go broke.

Government is not the answer to every problem. That's what this election is about: whether we will have any semblance of a free market or whether we will devolve into a nanny state. President Obama is volunteering to be everyone's nanny--unless you're rich, own a business, pay your bills, etc.

fate

Government is not the answer to every problem.

Government was a large part of the problem in the creation of the housing bubble. In large part by letting banks have what they wanted , far less regulation on the mortgage markets and on use of MBS in derivatives and other "financial packages." Changing from previous more stringent regulation was most of the problem.

If the banks chose, of their own accord, to renegogiate large numbers of these under water mortgages you'd have no problem with it?
If the local governments, acting to protect the current tax payers and current physical environment are able to persuade banks in their area to make this decision - without the use of more money from the tax payer.... hows that a problem?
Especially as it might well be in the banks best interest to renegotiate and revalue their holdings...

Again, Doc, you can't help but make this about Obama. We are talking about a local city government initiative.

danivon wrote:Again, Doc, you can't help but make this about Obama. We are talking about a local city government initiative.

He has created an environment wherein government knows no bounds, so yeah, it's about Obama. They have been inspired by his leadership.

rickyp wrote:fate

Government is not the answer to every problem.

Government was a large part of the problem in the creation of the housing bubble. In large part by letting banks have what they wanted , far less regulation on the mortgage markets and on use of MBS in derivatives and other "financial packages." Changing from previous more stringent regulation was most of the problem.

Says you and lefty ideologues. Conservatives argue something else. Abusing eminent domain will have consequences, as in the Kelo Case.

If the banks chose, of their own accord, to renegogiate large numbers of these under water mortgages you'd have no problem with it?

Of course not.

If the local governments, acting to protect the current tax payers and current physical environment are able to persuade banks in their area to make this decision - without the use of more money from the tax payer.... hows that a problem?

That's not what is going on here.

Additionally, to get to what you are talking about would probably be legalized blackmail: "Do it or else."

fate

legalized blackmail

If its legal its not black mail. and it appears to be legal. Whereas black mail is still illegal. Nothing in the legal code has changed...
And yes, "do it or else" is the bottom line. It's the bottom line when a bank comes to a customer in arrears too. Pay up or we seize the house...

If a city is faced with the deterioration of significant portions of its community, not acting with all the powers available to them would be irresponsible.
Are banks part of the community? Do they have a social responsibility as well as a fiduciary responsibllity? If they are citizens, yes. Moreover, since taxpayers have underwritten their recovery, and since they have been granted special privileges as banks, that no other corporations have, they are important citizens.
If the use of eminent domain forces them to begin acting towards their clientele with a view that isn't only their bottom line - perhaps an accomodation can be found?
Without a more evenly powered negotiation it seems unlikely. And eminent domain may level the negotiation somewhat.

rickyp wrote:fate

legalized blackmail

If its legal its not black mail. and it appears to be legal. Whereas black mail is still illegal. Nothing in the legal code has changed...
And yes, "do it or else" is the bottom line. It's the bottom line when a bank comes to a customer in arrears too. Pay up or we seize the house...

If a city is faced with the deterioration of significant portions of its community, not acting with all the powers available to them would be irresponsible.

Identify this community that has such a widespread problem with empty homes or shut up.

Doctor Fate wrote:Identify this community that has such a widespread problem with empty homes or shut up.

Google too hard for ya?

America's emptiest cities

Fourth on the Forbes list was Riverside-San Bernardino in California, where the single-family vacancy rate soared to 6.4 per cent, the highest in the country, in the fourth quarter.

So, the city with the highest single-family vacancy rate is the one proposing this measure.

danivon wrote:

Doctor Fate wrote:Identify this community that has such a widespread problem with empty homes or shut up.

Google too hard for ya?

No, but I'm tired of doing his work. Good to see that you're still on his payroll. He needs a barrister.

America's emptiest cities

Fourth on the Forbes list was Riverside-San Bernardino in California, where the single-family vacancy rate soared to 6.4 per cent, the highest in the country, in the fourth quarter.

So, the city with the highest single-family vacancy rate is the one proposing this measure.

First, there is a difference between San Bernardino and San Bernardino County, which is the one proposing the wrongful use of eminent domain.

Second, you missed the point of the article rickyp posted originally:

The Los Angeles Times quotes David Wert, a spokesman for the county as saying the country would use eminent domain to condemn mortgages on properties that are underwater, that is the owner owns more on the mortgage than the value of the home, and would then renegotiate the mortgages at a lower amount. Only homeowners who are current on their mortgage payments would be eligible for the program.

The move is intended to help stimulate the region's hard-hit economy by freeing up people who have been stuck in their homes, Wert said. "Real estate is the foundation of the inland economy, [It] is based on the building and selling of homes, and this is one way to stimulate that again."

The program is still in its initial stages and additional details will

So, it's only for people who are current--like me. That means they're just getting a bailout they don't need. It will do nothing for already empty homes or for those in danger of being foreclosed upon.

So, thanks for all your blowhardiness, but it was a waste of your effort because you didn't prove what you sought to prove.

fate

Identify this community that has such a widespread problem with empty homes or shut up

You don't read very well do you? From the article....

The Homeowner Protection Program, in which San Bernardino would partner with the cities of Ontario and Fontana within its borders.

Obviously the cities of Ontario and Fontana percieve a problem or potential problem.

Fate

So, it's only for people who are current--like me. That means they're just getting a bailout they don't need. It will do nothing for already empty homes or for those in danger of being foreclosed upon

Its a preventative program. Its there to help people who might consider defaulting as oppossed to throwing money into the mortgage hole .
It doesn't reward those who've already used the strategy, or through necessity, have walked away from their mortgage. There's no reward for potentially immoral behaviour.
But, if followed, and banks renegotiate it can innoculate the cities against the spread of empty houses. (Like you see in the list that Danivon provided. Did you read that?)
Shouldn't a city govenrment do everything it can to preserve the real estate values, the business enviroment and the tax base? Even if that means taking on recalcitrant banks..... who frankly will probably net out evenly since they lose most of the time they repossess a home these days.
Shouldn't banks, as citizens of these communities, want to do this even without the threat of eminent domain forcing them? That they don't seem to, seems to me that levelling the playing field is also a moral choice by the cities involved.

I get it now. San Bernardino County has looked at the city and thought "we do not want that!", so are suggesting a way to avoid it.

I guess that the idea is to stop people who are currently in negative equity from going further into trouble - say for instance they lose their job. Not everyone who is in negative equity would need it, but surely the fact that it's designed for people who have not got behind means that it rewards 'responsible' borrowers.

rickyp wrote:fate

Identify this community that has such a widespread problem with empty homes or shut up

You don't read very well do you? From the article....

The Homeowner Protection Program, in which San Bernardino would partner with the cities of Ontario and Fontana within its borders.

Goodnight, physician heal thyself! You wrote:

If a city is faced with the deterioration of significant portions of its community, not acting with all the powers available to them would be irresponsible.

If you meant "San Bernardino," you should have said so instead of positing it as a theoretical "city." Read your own article and respond to it, don't tell me what to do if you don't do it.

Obviously the cities of Ontario and Fontana percieve a problem or potential problem.

See, so much for reading. It's those cities PLUS the County of San Bernardino. Again, if you maintained consistency, it would be more clear to everyone else.

Fate

So, it's only for people who are current--like me. That means they're just getting a bailout they don't need. It will do nothing for already empty homes or for those in danger of being foreclosed upon

Its a preventative program. Its there to help people who might consider defaulting as oppossed to throwing money into the mortgage hole .

No, it's really not. There are empty houses and this would not change that. What it would do is wipe out the "underwater" status of those who are current on their mortgages. In other words, the local entities would forcibly write down the mortgages.

It doesn't reward those who've already used the strategy, or through necessity, have walked away from their mortgage. There's no reward for potentially immoral behaviour.
But, if followed, and banks renegotiate it can innoculate the cities against the spread of empty houses. (Like you see in the list that Danivon provided. Did you read that?)

It won't put one person in an already-vacated home. Period.

Shouldn't a city govenrment do everything it can to preserve the real estate values, the business enviroment and the tax base?

No. It should honor the idea of contracts meaning something. If the banks have broken the law, there are remedies for that. Breaking the law again is not the answer. It's municipal vigilantism.

Shouldn't banks, as citizens of these communities, want to do this even without the threat of eminent domain forcing them? That they don't seem to, seems to me that levelling the playing field is also a moral choice by the cities involved.

This is just dumb. You buy property A for price x. After 5 years, the property is worth 0.7x because the market has dropped. The bank is obligated to write down the loan? Really?

So, if it went to 2x, is the buyer obligated to refinance at double the original price?

Same principal, but slightly different outcome. We only want the banks to take it in the shorts!!!

Think like a capitalist.