Seizing Homes Using The Power of Eminent Domain

Seizing Homes Using The Power of Eminent Domain

Posted: Updated:

The nationwide housing recovery has not hit the City of El Monte. Some home loan modifications and federal help have scarcely pulled neighborhoods out of financial crisis...with an estimated one thousand homeowners on the brink of foreclosure. And now frustrated city leaders may take an unprecedented step to save homeowners saddled with these underwater mortgages.

The strategy... Seizing those homes using the power of eminent domain. Then city would first condemn home, take it, and then offer to sell it back to the bank for what the city considers "fair market value." The bank's shareholders and investors would essentially absorb any losses. Wall Street groups including a group called SIFMA strongly oppose the tactic and are meeting with city leaders.

But opponents warn eminent domain could do more harm in the end...because banks would become afraid to invest or lend more to these depressed communities.

Critics also say the move is unfair to investors...as many of these loans are bought by 401k and pension plans.

SIFMA released this statement : 

Tim Cameron, Managing Director, Head of SIFMA AMG: 

"We strongly oppose the use of eminent domain to seize mortgage loans, and believe it is a serious mistake to pursue a plan that would harm investors, constrict credit for borrowers and depress housing prices just as the housing recovery is gaining steam. 

"Asset managers have a fiduciary duty to protect their clients, who are the investors—the teachers, firefighters, policemen and other middle-class American savers—who put their money into 401(k)s, pension plans, IRAs and other savings vehicles that invest in mortgage-backed securities. The eminent domain proposal targets MBS and tears mortgage contracts apart, creating a loss for investors and significantly undermining the trust and confidence investors and savers have traditionally had in America's."

San Bernardino County and two of its cities rejected this option to avoid a costly legal battle. The El Monte City Council will vote on whether to employ this strategy tomorrow.   Two dozen other local state governments are also considering it including Seattle, Newark, and North Las Vegas.

  • Share ThisMore>>

  • Anaheim's Wonderful WonderCon

    Anaheim's Wonderful WonderCon

    Saturday, April 19 2014 9:01 PM EDT2014-04-20 01:01:06 GMT
    It's Easter weekend and while some may be spending their time at Mass, there is a group of passionate people showing up in mass to celebrate their favorite superheroes at the Anaheim WondeCon.
    It's Easter weekend and while some may be spending their time at Mass, there is a group of passionate people showing up in mass to celebrate their favorite superheroes at the Anaheim WondeCon.
  • Kidnapping "Prank" Goes Bad, Parents Not Amused

    Kidnapping "Prank" Goes Bad, Parents Not Amused

    Friday, April 18 2014 1:58 PM EDT2014-04-18 17:58:38 GMT
    Twins brothers with a YouTube channel filled with their pranks say they weren't trying to make a joke. Serious intentions or not, a park full of parents were not amused by their latest stunt. This video is a must-see!
    Twins brothers with a YouTube channel filled with their pranks say they weren't trying to make a joke. Serious intentions or not, a park full of parents were not amused by their latest stunt. This video is a must-see!
  • Griffith Park Mountain Lion Found Sick, Possibly Poisoned

    Griffith Park Mountain Lion Found Sick, Possibly Poisoned

    Thursday, April 17 2014 3:26 PM EDT2014-04-17 19:26:14 GMT
    Rat poison may be responsible for the sorry condition of a wild mountain lion in LA's Griffith Park. The mountain lion is known to the National Park Service as ‘P-22'.
    Rat poison may be responsible for the sorry condition of a wild mountain lion in LA's Griffith Park. The mountain lion is known to the National Park Service as ‘P-22'.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices