Posted by HisHughness on 7/15/12 1:54pm
Msg #426934

Interesting approach to helping underwater homeowners

http://www.nytimes.com/2012/07/15/us/a-county-considers-rescue-of-underwater-homes.html?nl=todaysheadlines&emc=edit_th_20120715

Reply by GOLDGIRL/CA on 7/15/12 3:06pm
Msg #426945

I predict this will go nowhere

..but you never know. It's a very interesting idea, about 5 years too late, but still ....
Using eminent domain to seize property (in this case, property that investors are sitting on and have been for years, ostensibly waiting for the market to go back up (?!) or hoping that they can at least recoup some $$ after booting out the current occupants and reselling) might actually fly. The county could argue that it was the banks that got us into this mess (duh) and they're doing nothing to help (duh) and therefore the county, in the interest of its residents and public welfare etc etc, has to intervene.

I can't possibly imagine what defense the banks could come up with to protest this move - at least any defense that a judge would accept (at least a judge not on the take).

Reply by Susan Fischer on 7/15/12 6:16pm
Msg #426963

But the bubble was still blowing up five years ago. There

are many good ideas to hurry-up the uptick, and if private lenders are willing to buy loans and not play Casino with the paper - in other words - without the tools of the crooked trading schemes - then what a boon to the struggling Middle Class and our Economy.

We just all need to come together, and make the banks, or private lenders, all the 'whoevers' who hold Paper, to play by sane rules again. Level the ol' playing field, as they say. You nailed it - there is NO defense for the Banks.

I want to have hope that these efforts in many states get a chance to work.

Reply by GOLDGIRL/CA on 7/15/12 7:22pm
Msg #426968

Amen, Susan

But as far as I can see Obama has a loooog way to go to show any real interest in the welfare of the middle class vs. banks/lenders/investors/whoevers; and of course, Romney isn't even in the same universe. That observation may or may not belong in JP; but in any case, this latest plan seems to be a bunch of Wall Street investors trying to come up with an idea to make $$ while actually helping the middle class, as well vs. a bunch of Wall Streeters trying to come up with an idea to make $$ for themselves.

Wanna be an investor in this plan?

Reply by Susan Fischer on 7/15/12 7:28pm
Msg #426971

But Congress *has* to admit They need the rules 'n regs... n/m

Reply by Philip Johnson on 7/15/12 9:58pm
Msg #426984

Just a problem or two.

1. Contract law.
a. Were the buyers over the age of 18 when they signed?
b. Were they clear headed, not under the influence of drugs or alcohol?
c. Were they coerced into buying the property, by either the Real Estate agent or lender?
d. Were they looking at the property as a home or a retirement plan?
e. Why stop with houses? Buy a new car, as soon as you drive it around the block, that dirty deprecation kicks in, and most are underwater at that point.
f. Doesn't the law of financial gravity apply to this transaction, along with every other financial transaction? ( not every thing goes up, sometimes things come down)

2. As for the city using eminent domain.
a. What about the citizen's in the community who are renters? Why should their city/county government take on this, when they had the "good sense" to rent rather than own?
b. What about folks who cut a good deal, put down 20% and are not underwater, what's in it for them, to bail out their neighbors?
c. What about future homeowners in this community? There will be no one lending to them without, an outrageous risk premium built in, on the off chance that if you'll do it once, nothing will stop you from doing it again.
d. My retirement savings have taken a hit, is Uncle Sam or Uncle "California" going to step in and make everyone whole in this as well?
e. The Federal constitution, along with in my case the State of Washington's constitution is very clear that eminent domain is for property that can be used for the public use. Not paper that can be bought, devalued and sold again to another set of investors.

I don't think we want to start monkeying around with contract law. There is so much distrust in the system today, that if basic contract law is upended and destroyed, we will be pretty much toast going forward.

Reply by HisHughness on 7/15/12 10:34pm
Msg #426985

Re: Just a problem or two.

*** if basic contract law is upended and destroyed, we will be pretty much toast going forward.***

What the financial institutions did to create those foreclosures in the first place not only upended contract law, it turned it into a damned whirligig. If the use of eminent domain will help right those wrongs and move us toward a cure of our housing crisis, I'm all in favor of eminenting the hell outta our domains. That's what government -- especially local government -- is supposed to be about: Serving its constituents.

Eminent domain has a long history of being used for ends that would benefit communities. It has been used to gentrify blighted areas. It has been used to help private colleges expand. It has been used to build entertainment attractions. The only major issue I see with the proposed approach is whether the primary beneficiaries would be the financial institutions that created the crisis in the first place, or the homeowners.

And no, Philip, not every homeowner, probably not even a majority of them, were culpable in their current plight. It is telling that your first seven paragraphs dealt with the alleged shortcomings of the homebuyers, without in any way addressing the contributions of JPMorgan Chases or Goldman Sachs et al to the bubble.

Reply by Philip Johnson on 7/15/12 11:17pm
Msg #426987

Now Hugh.

There is a good reason I started with individuals. Mainly because that's what the country is built on, the right of the individual to pick and choose what his best for him/her in their life.

I guess we will just look at our fellow citizens in a different light. I see us/them as free willed, thinking, participants in a system that with hard work, education and a desire to better themselves, there's a darn good chance of success.

You seem on the other hand to view us as the oppressed under the thumb of the man, who only by the grace of whatever religious honcho they believe in are able to scrape by. I believe the term de-jour is "vulnerable" their only hope is that some crusading do-ggooder will rescue them, from their bad/ill informed decisions.

Well Hugh, I and millions of others don't need Clark Kent, we'll be fine, I even think you'll be fine. I do think however, that you'll need to let go of the notion that your fellow citizen is just a serf to the man, and needs big brother to care for his every need.

Reply by Buddy Young on 7/15/12 11:47pm
Msg #426989

Re: bad/ill formed decisions???????

The housing market in this country, well in California anyway has gone up at a 45 degree angle for 50 years, that is until our current economic funk.

So are you saying that buying a house for any reason 5 years ago was a bad / ill formed decision? What would you base that on?

Reply by Philip Johnson on 7/16/12 3:00pm
Msg #427042

Re: bad/ill formed decisions???????

Those caught in the downside of housing, would say so, Buddy.

Reply by GOLDGIRL/CA on 7/16/12 12:56pm
Msg #427031

It takes two to tango, Philip ....

.... yet you sound like America is still this wide open frontier and all a rugged individual needs to do is homestead 160 acres, raise a few head of cattle and eveything will be fine. You've been watching too much "Bonanza." You ignore the fact that the housing market collapse was completely out of the control of us "homesteaders" and was a blatant failure of "Clark Kent," i.e. the U.S. government financial regulators, to rein in greed-driven, irresponsible lenders/investors/banks ... which, incidentally, were bailed out by "big brother," who did care for their (Wall Street's) "every need."
Yet, as a result of all this, millions of your "fellow citizens" are now out on the street ... literally. They were lied to, mislead and in large part victimized. And BTW, nothing much has changed, ya' ask me .....

Reply by Philip Johnson on 7/16/12 2:59pm
Msg #427041

Easy my Argentine Partner.

Living here in the promised land for a bunch of Californians who sold a double wide in Oceanside, and bought quite a spread here with the proceeds. I'm not sure the bankers were the only ones who came up greedy.

You can still watch on cable all of the California flipper shows, that showed a number of homeowners who bought with borrowed money in May a $200,000 home, sold it in July for $350,000. Do you think they shared the proceeds with those evil greedy bankers, who lent them the money?

Plenty of blame to go around, before we call on Madam DeFarge to help us rid ourselves of those greedy so and so's.

See you on the dance floor, lil' lady.

Hoss

Reply by GOLDGIRL/CA on 7/16/12 3:34pm
Msg #427044

Do se do and around we go ...

Geez. You can't be serious. You can't possibly believe those flip shows! What do you expect they'll air? Stories about 4 cities in CA so far (tip of the iceberg) declaring bankruptcy cos there isn't enough property taxes to pay the bills anymore? People defaulting. Lenders foreclosing. Underwater borrowers drowning. Sheriff's deputies banging on the door at 11 p.m. giving the occupants 1 hour to get out. That's the norm here. I'd give you a dollar for each and every house selling for a $150,000 profit anywhere in the CA for the past few years. Are you kidding?

And all I know about property values in Oceanside (one of the most scenic spots on the coast) and those in your neck o' the woods: It has everything to do with capitalism, which you extol, and if you want to call that evil greed, be my guest.

Reply by Lee/AR on 7/16/12 3:49pm
Msg #427048

I dunno...have quite a few ex-CA's here that made out well

Guess they knew when to hold 'em; knew when to fold 'em... etc.

Just did a purchase for a couple who bought their old/sold home back after foreclosure for a song--compared to what they sold it for.

So, yeah, I do believe... some did; most didn't.

Reply by Signerbill on 7/16/12 12:16pm
Msg #427028

This is a court case in the making and the lawyers are going to suck every last dollar out of the county for doing this. ED is for the PUBLIC GOOD so unless the county EDs the property and turns it into a park, etc...
Lets not forget that the banks are going to want THEIR due process to recover losses... and they have a butt loan of cash to protect themselves.

Reply by HisHughness on 7/16/12 12:33pm
Msg #427029

Best inadvertent but accurate typo lately about banks

"they have a butt loan of cash"