California County Weighs Drastic Plan to Aid Homeowners

[MindMover]

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.

http://truth-out.org/news/item/10337-california-county-weighs-drastic-plan-to-aid-homeowners

[AnotherMcIntosh]

1. Buying up the mortgages with eminent domain would be another way to bail out the banksters.

If they follow through with this plan, the mortgage holders would be entitled to compensation equal to the full fair-market value of the mortgages. In the absence of a foreclosure resulting in a deficiency, it would be presumed that the full fair-market value would be equal to full amount of the property owner's debt to the mortgage company.

Before any news reporter thinks that this is a wonderful idea and the Fontana officials are acting out of the goodness of their hearts, they should investigate the public records and find out how much was donated by local banks and other local mortgage companies to the elected Fontana public officials.