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View Diary: How the Big Banks are Continuing to Syphon Wealth from Our Communities & Our Local Govenments (27 comments)

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  •  Would be great if cities started using... (5+ / 0-)

    ...eminent domain to reclaim houses foreclosed on by lenders and allowed to fall into disrepair.  Under Kelo v. New London, this is certainly permissible.  Certainly, the city would have to "compensate" the bank for the taking, but all they would really have to do is have an assessor come out and give the property a very low assessed value (appropriate if the bank allowed the property to fall into disrepair), cut them a check for that amount, clean the property up, and resell at a profit.  The banks might come to see that loan mods are a more profitable way to go for them than foreclosure.

    The road to Hell is paved with pragmatism.

    by TheOrchid on Tue Apr 02, 2013 at 09:06:07 AM PDT

    •  great point (4+ / 0-)
      Recommended by:
      TheOrchid, elwior, Spedwybabs, 3goldens

      This is discussed in our report (on page 17 --> http://bit.ly/...)

      Robert Hockett, a Cornell Law Professor, has advanced a plan whereby cities, in partnership with private investors, would purchase underwater mortgages (the loan not the actual property) for the fair-market value. By using eminent domain, the city can take possession of mortgages and write them down to current market values, preventing the loss of billions of taxpayer dollars and creating an enormous economic stimulus for the city.
      We'll be writing more on this in a later post.
      •  Eminent domain used the right way is (2+ / 0-)
        Recommended by:
        elwior, FG

        A real boon for communities.  It can be used to KEEP the homeowners in their homes by having the new entity reduce the mortgage principle or issuing a new, lower loan.  

        It can also be used in REO, Real Estate Owned, i.e. bank owned properties, empty properties for affordable housing in the NY City, which has a very short  supply of affordable housing at all income levels.

        Debra "But what I have concluded over the years is that talent is universal, but opportunity is not." SOS Clinton

        by debcoop on Tue Apr 02, 2013 at 10:52:50 AM PDT

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      •  I noticed in Detroit (1+ / 0-)
        Recommended by:
        Chi

        That despite the fact that I can afford cash for these properties. The banks have inserted a caveat that I have to qualify for their loan to purchase the property from them. So not only would I have to pay for a loan application I did not need. They get to decide if I can buy the place or not.

        How is this even legal?

        It is crap like this propping up the market to keep their profits rolling in at our expense.

        "Til you're so fucking crazy you can't follow their rules" John Lennon - Working Class Hero

        by Horace Boothroyd III on Tue Apr 02, 2013 at 11:55:39 AM PDT

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    •  Unfortunately in this city (3+ / 0-)
      Recommended by:
      elwior, mollyd, TheOrchid

      eminent domain seems to be used to give the powerful more land to develop on.

      Columbia University expansion into Harlem

      Atlantic Yards in Brooklyn

      and now the mega-est project of them all: Hudson Yards on Manhattan's West Side.

      Bloomberg's finishing up what Giuliani started: making Manhattan into an urban version of suburbia, pushing out the everyday New Yorkers that give (gave) the city its character, in the name of the great homogenization that is global capitalism. Manhattan is basically a kind of theme park for the 1%.

      There are moments when the body is as numinous as words, days that are the good flesh continuing. -- Robert Hass

      by srkp23 on Tue Apr 02, 2013 at 09:50:22 AM PDT

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