General Discussion

steve2470

(37,457 posts) Sat Jul 14, 2012, 06:57 PM Jul 2012

California County Considers a Rescue Plan for Struggling Homeowners

http://www.nytimes.com/2012/07/15/us/a-county-considers-rescue-of-underwater-homes.html?pagewanted=all

FONTANA, Calif. — Browning lawns surround the otherwise neat houses in these once-sparkling developments where foreclosures have become more common than neighborhood cookouts. Each patch of dead grass is a reminder of the inescapable truth: many homes here, as they are elsewhere around the country, are worth half what they were just five years ago.

Desperate for a way out of a housing collapse that has crippled the region, officials in San Bernardino County, where Fontana is one of the largest cities, are exploring a drastic option — using eminent domain to buy up mortgages for homes that are underwater.

Then, the idea goes, the county could cut the mortgages to the current value of the homes and resell the mortgages to a private investment firm, which would allow homeowners to lower their monthly payments and hang onto their property.

Although the county has a long way to go before it could put the policy in place, the mere idea has already rankled the banking community, whose leaders say it would set a dangerous precedent of allowing a government entity to act as a lender and would discourage banks from granting loans in the area.

*end of excerpt*

This looks very interesting. Feedback anyone ?

7 replies

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California County Considers a Rescue Plan for Struggling Homeowners (Original Post) steve2470 Jul 2012 OP

How many fucking loans are the banks making in the area now? I would hate Vincardog Jul 2012 #1

Fu-k Banks being discouraged from granting loans orpupilofnature57 Jul 2012 #2

It's a good idea, it should be done, and private investment firms acting as leinholders.... NYC_SKP Jul 2012 #3

If the banks don't like it... 99Forever Jul 2012 #4

The neighboring city of San Bernardino has filed for bankruptcy tularetom Jul 2012 #5

If it makes the banksters mad, it's probably a good plan. NT Trillo Jul 2012 #6

I have to wonder how Mortgage Resolution Partners, the firm that approached SB County benefits... cherokeeprogressive Jul 2012 #7

Vincardog

(20,234 posts)

1. How many fucking loans are the banks making in the area now? I would hate

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:01 PM

Jul 2012

to discourage the banksters.

orpupilofnature57

(15,472 posts)

2. Fu-k Banks being discouraged from granting loans

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:02 PM

Jul 2012

As if money isn't only being allocated to carry water and profit to the 1% .

NYC_SKP

(68,644 posts)

3. It's a good idea, it should be done, and private investment firms acting as leinholders....

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:11 PM

Jul 2012

...is no different than banks holding the deeds.

I don't see the problem with the government facilitating this.

What would be nice is if the original mortgage holders could have first pop at the new, lower priced mortgages.

99Forever

(14,524 posts)

4. If the banks don't like it...

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:22 PM

Jul 2012

... you know it's the right thing to do.

FUCK THE BANKS.

ALL of 'em.

tularetom

(23,664 posts)

5. The neighboring city of San Bernardino has filed for bankruptcy

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:27 PM

Jul 2012

due mainly to the loss of tax revenues from the housing bust. I'd be surprised if the county as a whole was that much better off, which makes me wonder where they think they're going to come up with the seed money to buy all these mortgages in the first place.

If their credit rating is good enough that they can sell bonds then I guess the idea is worth exploring. But it's hard for me to imagine they'd get a very good interest rate on any borrowed money based on some mortgages that are still somewhat shaky.

Trillo

(9,154 posts)

6. If it makes the banksters mad, it's probably a good plan. NT

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:57 PM

Jul 2012

cherokeeprogressive

(24,853 posts)

7. I have to wonder how Mortgage Resolution Partners, the firm that approached SB County benefits...

Reply to steve2470 (Original post)

Sat Jul 14, 2012, 07:58 PM

Jul 2012

from this and why this whole thing transpired in secret for so long. A confidentiality agreement was signed Feb. 18 when the company was sounding out the county about the idea. When the company was sounding out the county about the idea.

I also wonder where SB County gets the money to buy the mortgages from their current owners seeing as how they're in much the same position as the City of San Bernardino was before it decided to file for bankruptcy.

One of Mortgage Resolution Partners' partners is "the Managing Partner of Westpark Community Builders which developed 1,500 acres in Roseville, California and planned and entitled 4,300 residential units which were sold to the three largest builders in the United States. Westpark is continuing to develop master planned communities in Roseville consisting of several thousand residential units. In addition, as CEO of Live Oak Enterprises, he has developed the Whitney Oaks master planned community in Rocklin, California with a championship Johnny Miller designed golf course and 2,000 homes."

I'd have to agree that lenders who face the possibility of having their deeds taken from them under the principle of eminent domain are going to be hesitant to do business in San Bernardino County in the future.

Kinda sounds to me like the rich getting richer on the backs of the unfortunate.

http://www.pe.com/local-news/san-bernardino-county/san-bernardino-county-headlines-index/20120707-san-bernardino-county-mortgage-proposal-initially-kept-quiet.ece

http://www.law.berkeley.edu/13068.htm

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