Comments on: San Bernardino will try to hammer ‘Nail House’ loans in 2013

By: CalPERS, the New CA Octopus — California Political Review

CalPERS, the New CA Octopus — California Political Review — Wed, 19 Dec 2012 16:01:09 +0000

[…] County of San Bernardino has recently retained Mortgage Resolution Partners to explore using eminent domain to condemn “underwater mortgages” […]

By: Wayne Lusvardi

Wayne Lusvardi — Tue, 04 Dec 2012 21:29:46 +0000

Duh, this would be “crony socialism” not crony capitalism

By: JoeThePimpernel

JoeThePimpernel — Tue, 04 Dec 2012 19:10:23 +0000

Plank #1 of the Communist Manifesto is abolition of private property.

And away we go!

By: Sean

Sean — Tue, 04 Dec 2012 19:09:15 +0000

If the Obama administration can pretty much throw out bankruptcy law to screw GM bondholders to benefit the unionized employees, then I’m pretty sure San Bernardino can do the same mortgage holders to benefit city/county property owners.

The rule of law is long gone here in the U.S.

By: Dyspeptic

Dyspeptic — Tue, 04 Dec 2012 07:28:34 +0000

Although the scenario Wayne reveals here is an outrageous example of crony capitalist exploitation I have to point out something ironic about the whole nail house phenomenon – Apparently in China individual property owners have enough economic rights to resist eminent domain to the point of having highways built around their houses. Can anyone imagine an American homeowner having that kind of clout with any government agency?

By: Hondo

Hondo — Tue, 04 Dec 2012 03:04:39 +0000

This intrusion of the marketplace will have ill effects not seen yet. The possibilities for fraud are beyond belief. Are they telling us to “trust us”. This is how we got into this mess in the first place.
This whole mess was caused by insane intrusions into the mortgage marketplace. Fanny and Freddy have no business being in sub prime loans. Let alone being the catchers mitt for most of Amerika’s mortgages.
My boss was, and is into letting out sub prime loans. He was stunned to find out he could dump all his bad paper on wall street.
When he foreclosed on a house, he called me up. I called for a roll off dumpster, cleaned out the mess, painted the walls, got the carpet laid, put a new lock on the front door and a for sale sign in the front yard. That is a small business approach to the problem.
There is a real place in the market place for sub prime loans. Not on wall street.
I can see another train wreck coming with this eminent domain scam.
Hondo….

By: Wayne Lusvardi

Wayne Lusvardi — Mon, 03 Dec 2012 23:11:28 +0000

Mr. Rex
You raise in an interesting issue. Does the taking of loans without the consent of the mortgagee (borrower) violate his right of due process?

Presumably, most property owners with underwater mortgages would consent to a write-down of their mortgage balance owed.

But in my experience in working for a housing authority there will have to be a clause added in any such loan write down contract which specifies that any and all value appreciation in the home over the write-down value must go to the state or to the lender. Otherwise, this proposed loan write down by eminent domain would be nothing but a naked gift of public funds (which is Constitutionally illegal). So there may be some wise homeowners who would not want their loan written down IF it was conditional upon forfeiting any future home price appreciation.

By: Rex the Wonder Dog!

Rex the Wonder Dog! — Mon, 03 Dec 2012 21:39:13 +0000

Mortgage Resolution Partners is a private mortgage hedge fund manager hired by the county of San Bernardino. It now has vowed to move ahead with its controversial plan to use eminent domain to buy out “underwater mortgages” from lenders. MRP’s plan is to take the mortgages by force of eminent domain law from lenders, reduce the amount owed on each loan and let the homeowners continue to live in their homes while making lower payments.
==
If that does not violate the due process clause then nothing does.