Seizing Mortgages Through Eminent-Domain Power.

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281
http://actvra.in/DyJ

Eminate-domain power is being considered by some California cities as a way to turn around the housing market.  The Wall Street Journal writes about it today.

At first glance, it might sound really good.  It reduces the principle down to current home values and allows  upside homeowners to get right side up again.  That is deemed to be a public good which is being argued as a legitimate use of eminent-domain power.

But look whose idea this was.

"The eminent-domain gambit is the brainchild of San Francisco-based venture-capital firm Mortgage Resolution Partners, which has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors. The company's chief executive, Graham Williams, is a mortgage-industry veteran who helped pioneer lending programs for low-income borrowers at Bank of America Corp. BAC -1.91%in the early 1990s. Its chairman, Steven Gluckstern, is an entrepreneur who once owned the New York Islanders hockey franchise. Evercore's founder and co-chairman, Roger Altman, served in the Clinton administration and is raising funds for President Barack Obama's re-election effort."

Isn't that nice.  Let's just use the power of government to set up some sweet deals for the politically connected.

They aren't going after the mortgages that are in default or where the borrower has a hardship.  These are going to be mortgages where borrowers will be required to be current on their payments.  So it's a really sweet deal for the investors because they get to make loans to borrowers who have proven to be good risks.

I guess it's a good deal for everyone except for the investors of the original mortgage.  Today they have a mortgage that is current, at an interest rate that probably is higher than current rates.  Then out of no where, the government swoops in and pays them maybe 50 cents on the dollar.  They are forced to take a big hit right now but then don't have the opportunity to get in on the new mortgage, unless they are connected to the right people.  To me, that just doesn't sound like America.  That sounds like a banana republic.

Here is a typical scenario that they envision:

"For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program's private financiers would fund the city's seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors."

Between this and the recent ruling on the Affordable Health Act, is there no limit to what the government can do?  Do we still have property rights?  Do we still have a free market?  Independence Day?  Yippee!!!

Posted by
About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com where he has market price charts of 37 areas around Atlanta with data going back over 10 years.  His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

A visit to Tim's  YouTube Channel will make you see why RealtyBizNews.com says that "Tim Maitski may just be America' most vocal real estate professional"

Tim is always looking to LinkIn with anyone who is interested in building their social network.

View Tim Maitski ●Atlanta Realtor●'s profile on LinkedIn

close

Re-Blogged 6 times:

Re-Blogged By Re-Blogged At
  1. David Farrell 07/07/2012 12:32 AM
  2. Daryl B. DeShaw 07/07/2012 06:35 AM
  3. Dara Tancredi 07/07/2012 09:35 AM
  4. Wendy Remley 07/07/2012 09:38 AM
  5. Shanna Day Mega Team Leader (AZ & UT) 07/07/2012 12:15 PM
  6. Paula Hathaway, REALTOR, Sr. LBA, 07/08/2012 07:17 AM
Topic:
ActiveRain Community
Groups:
Atlanta ActiveRain Meetup
Tags:
mortgage
eminent domain

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cat to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the scissors to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainer
53,630
Linda Fidgeon
Prudential Page Realty - Foxboro, MA

Tim,

You were doing good until the last paragraph, and then you just turned into another partisan nut.

July 09, 2012 01:28 PM #119
Rainer
57,445
Wayne Jackson
Lakeshore Realty 208-714-4109 - Hayden, ID
North Idaho Realtor, Serving Coeur dnullAlene and Hayden Lake

Linda #119 I don't see what is partisan about wanting the right to work hard, prosper and then help others. This is something everyone in the world deserves but very few politicians believe in it.

Ana #117, Right on but it's worse than you think and it's much bigger than AIG. Did you know that some of the investors in AIG didn't loose anything. Just before AIG went under large sums were transferred to a bank in Israel and from there certain favored investors were paid back. Since this transfer was not legal the government could have recovered these funds but did not even attempt it. I suspect these investors have connections in congress(both parties Sina).

The banker bailout has cost the taxpayers between $16 Trillion and $26 Trillion depending on which estimates you believe. These figures are for the total from TARP, US Treasury and the Federal Reserve. The National Debt is only about $15 trillion.

The S&L crisis of the 80's was about 5% the size of the current "Mortgage Crisis". At that time hundreds of bankers were prosecuted and many went to prison. Many legal experts have stated that their is plenty of evidence today to charge bankers with fraud and other charges too technical for U & I to understand. Not one has been prosecuted. Today's bankers are smarter than yesterdays. They share their profits with congress (both parties Sina).

True capitalism consist of both risk and reward. Bankers always take the reward but with the help of congress (both parties Sina) they put the risk onto the taxpayers. Economist refer to this system as "Corporatism" but the definition is the same as Fascism.

For those who would like to learn more about economics in an enjoyable and entertaining manner try watching On The Edge with Max Keiser once a week.

http://www.presstv.ir/section/3510532.html

Or the Keiser Report, it's online 4 times a week.

http://rt.com/programs/keiser-report/

 

July 09, 2012 04:22 PM #120
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

I haven't heard any overtly insulting comments until yours Linda #119. Let's not into attack mode. Afterall aren't we all one big family on AR. 

July 09, 2012 05:26 PM #121
Rainer
27,818
Sina Mollaan
W.C. & A.N. Miller, A Long & Foster Company - Washington, DC
ABR, GRI

John, I'm not on your side of the fence or the left's side of the fence, I'm on America's side of the fence.  I can site at least a dozen instances where Bush used the Patriot Act but since you're obviously a typical right-wing conservative, I really don't want to waste my time because nothing I say will change your mind.

Tim, you seriously think government should get out of the way and let corporations run free?  I can give you a hundred examples of why that's not a good idea but I'll just site the latest, Barclays.

Wayne, both parties are absolutely to blame but the GOP deserves THE BRUNT of the blame.  We have to stop with the false equivalency.  When a car rear-ends another car, both cars are not equally at fault.  And another thing, I absolutely will not read the freakin' Russia Times, are you joking?  I hate FOX news and some shows on MSNBC, you think I would waste my time with Russia Times, c'mon dude!!

July 09, 2012 05:27 PM #122
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

Sina, Au contraire. Obviously you didn't take the time to read my comments. I hate to embarrass you but:

#84, After reading all 82 comments (two being mine) I have to say that, as an "Independent" since Reagan left office and to be totally apolitical, I can't for the life of me understand how we can rationalize what these greedy bureaucratic land-grabbing/carpetbaggers are doing. Have we gone mad? Or are we just abandoning any sense of what America is/was all about?

Now, please tell me withc side of the isle I'm sitting on and once again don't paint anyone who disagrees with you with such a broad brush. Making assumptions or presumptions about folks in such an attacking manner won't win you any points.

July 09, 2012 05:45 PM #123
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

This brief snippet may sober this conversation up a tad.

http://www.youtube.com/watch?v=16K6m3Ua2nw&feature=related

July 09, 2012 06:14 PM #125
Rainer
27,818
Sina Mollaan
W.C. & A.N. Miller, A Long & Foster Company - Washington, DC
ABR, GRI

But John, I've never heard of an independent saying "Thank GOD for FOX NEWS! It's the only truth we really have in the media today."

Or one that repliles "You're absolutely right about that!" to my comment "But don’t worry, our freedom will magically come back and this nonsense will go away once we have a Republican president."

That really doesn't sound like an independent to me.

I encourage you to read It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism by Thomas E. Mann and Norman J. Ornstein.  http://www.amazon.com/Even-Worse-Than-Looks-Constitutional/dp/0465031331

July 09, 2012 06:24 PM #126
Rainer
27,818
Sina Mollaan
W.C. & A.N. Miller, A Long & Foster Company - Washington, DC
ABR, GRI

Haha, I love that show John, saw it for the first time last night and it immediately became my favorite show, I went on On-Demand and saw the first two episodes, it's a very smat show!!

July 09, 2012 06:31 PM #127
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

So now are we finally in the same camp? Sure I view FOX News as do I view, CNN, CNBC, FBN and any other media that makes sense instead of NONESENSE! And I view it as an INDEPENDENT with an open and objective mind. So please don't try to paint me with your broad brush. The more you do that the more jaded, biased and partisan you sound.

July 09, 2012 06:58 PM #128
Rainmaker
262,571
Eric Martell
RE/MAX Properties SW, Inc. - Orlando, FL
Ph.D.

A related blog post from ZeroHedge which may clarify the situation a bit: http://www.zerohedge.com/news/eminent-domain-transfer-wealth-program-challenges-remain

July 10, 2012 07:31 AM #129
Rainer
11,112
Dave Korte
Mak Home Realty - Yorba Linda, CA

The back and forth turned out to be better that the orginal blog.  :-)

July 12, 2012 12:34 PM #130
Rainmaker
449,396
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
The Agent Who Uses "Watermelon Tough" Sign Posts

John, #125.  Thanks for the clip.  Haven't seen that yet.

Sina, #122.  I was at first very sceptical just like yourself when I began seeing youtubes from Russia Today.  But I have to say that Max Keiser is pretty good.  Once you get past the Russia thing, you'll find some really good stories.  It's a shame that sometimes we have to get the real story from some Russian network. 

Your remark about Barclays.  The solution to that is prosecute and put them in jail.  That's the big problem.  These companies get off just paying a fine.  If they went to jail you probably wouldn't be seeing them do such stuff.  There has been a bunch of similar things come up over the past few years and no one goes to jail.  It's because it's a big revolving door.  The regulators look the other way because they don't want to mess up their chance for a nice job at one of the companies that they are watching over. 

Dave #118.  You are exactly right.  It's one little thing after another and before you know it everything is changed.  Incrementalism is what they call it. 

July 12, 2012 01:07 PM #131
Rainer
66,588
Michael Ford
EncinitasHomes.com - Encinitas, CA
California+Oregon

so let's recap...some dumbass in san francisco (you have to be from california to fully understand that city of true communists) wants the government authority to "take" brought to bear so  they can force existing performing loans to be transferrred from a currently happy note holder for the benefit of a private company. 

of course the plan will get traction at some level... and then  the plan will morph to something that is EVEN STUPIDER.  we need to kill  this baby in the crib

if such preposterous silliness gets you riled...get out your checkbook  and be a part of the solution.  clearly, voting is not as effective as many believe.  

the solution to eminent domain abuse IN ALL ITS FORMS  is legal action by skilled litigators. 

http://www.ij.org

if you don't believe in private property you are in the wrong business

 

July 16, 2012 08:22 AM #132
Rainmaker
449,396
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
The Agent Who Uses "Watermelon Tough" Sign Posts

EncinitasHomes.com #133.  You summed it up better than anyone.  Thanks.

July 16, 2012 08:31 AM #133
Rainer
27,818
Sina Mollaan
W.C. & A.N. Miller, A Long & Foster Company - Washington, DC
ABR, GRI
July 16, 2012 08:37 AM #134
Rainmaker
708,680
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Okay, I don't normally respond to political posts, but one thing that almost ALL commenters have missed is the need for someone to STEP UP FOR THE HOMEOWNERS.  HARP and HAMP and all the other "governement mandated" programs haven't worked.  Why should this one?  It sounds like there are some capitalists willing to force the issue and take on some of the risk.  Maybe each of us 100 plus commentators should take the time it took to write our comments to write to all of our congress people and senators and get the word out that the average American homeowner is hurting and needs SOME relief.  Maybe that would be a better use of our time than blasting the blogger or the possible outcome of a horrible situation.

July 17, 2012 09:10 PM #135
Rainmaker
449,396
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
The Agent Who Uses "Watermelon Tough" Sign Posts
Juli #136. I guess you believe it's the role of government to provide relief to the average American homeowner. I believe that it comes down to individuals helping each other out. Government is just the force that some try to use to force others to do what they deem to be the right thing. How about this? Go out and find some like minded people to chip in their own money so that you can raise enough money to give relief to some of these homeowners. It would empower you and give you a sense of fulfillment. It would set a great example and maybe others would follow. It would all be done freely and without any force. Individuals could freely decide whether their hard earned money should be used in this way or that maybe they should use their charity on other more worthy causes. The free market would allocate the resources instead of some politicians.
July 18, 2012 05:15 AM #136
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

Tim, if only that were the case it would truly be GOVERNMENT FOR THE PEOPLE AND BY THE PEOPLE. Wouldn't that be great and shoudn't that be the case instead of having socialism driven down our throats?

July 18, 2012 05:31 AM #137
Rainer
3,753
Susie Hafer
Cobalt Realty Group - Camarillo, CA
Susie Hafer, CRS, GRI, SFR

There is an upcoming seminar on eminent domain issues in Irvine, CA on June 6, 2013 that can help you and your clients.

 

Here's the link: http://www.scribd.com/doc/141625197/CRS-Educational-and-Networking-Luncheon-in-Irvine-June-6-2013

May 17, 2013 08:39 AM #138
Rainmaker
309,708
John DL Arendsen
TAG Real Estate Sales & Investments & ON THE LEVEL GC - Leucadia, CA
Real Estate Bkr, Factory Built home Dealer/Devlpr

Thanks Susie, as a matter of fact I'll be in Newport that day visiting family. I'll put that on my calandar.

May 17, 2013 09:36 AM #139
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the printer to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
449,396

Tim Maitski

The Agent Who Uses "Watermelon Tough" Sign Posts
Got a question? Not certain how to get started? Call me.
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the world to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information