To Rescue Local Economies, Cities Seize Underwater Mortgages Through Eminent Domain

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http://www.thenation.com/article/175244/rescue-local-economies-cities-seize-underwater-mortgages-through-eminent-domain#axzz2YviLbfZu



In 2005, Rodney Conway and his wife, Vicki, paid $340,000 for their 950-square-foot two-bedroom home in Richmond, California, a blue-collar city in the Bay Area. Today the home is worth about $140,000. But the couple still owes $320,000 and makes monthly mortgage payments to the Bank of America. “We’re basically renting this house for $2,000 a month,” said the 52-year-old Conway, who was disabled while serving on a Navy ship in Lebanon in 1983.

With her office job and his disability income, the Conways can barely make ends meet. “We don’t take trips or go to restaurants. We just went to a movie for the first time in a year,” said Conway, who spent twenty-six years as a letter carrier before being laid off in 2009. “I’d like to be able to give my wife a nice birthday present, but I can’t afford it.”

In almost every part of the country, entire neighborhoods—and in some cases, whole cities—are underwater. They are not victims of natural disasters like Hurricanes Katrina and Sandy. Like the Conways, they are drowning in debt, victims of Wall Street’s reckless and predatory lending practices.

Since 2006, when the speculative housing bubble burst, home prices have plummeted; homeowners have lost more than $6 trillion in household wealth. Many now owe more on their mortgages than their homes are worth. Despite rising home prices in some parts of the country, more than 11 million American families—one-fifth of all homeowners with mortgages—are still underwater, through no fault of their own. If nothing is done, many will eventually join the more than 5 million American homeowners who have already lost their homes to foreclosure.



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1. Anything that has Wall Street up in arms

is fine by me. And I like the local government "take-back" of control. Since the federal government can't / won't take on the banksters, we have to do it. Excellent news for small d-democracy.