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View Diary: Richmond CA Entertains Populist Revolt Against Wall St. (102 comments)

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  •  Wow! As someone who is called friendly (8+ / 0-)

    to bankers here (wrongly btw, I just know the law) this is a seriously creative and plausible move.

    The Takings Clause is designed to be used for the "public good" and to enhance the collection of tax revenue.

    T and R for discussion.

    "The way to see by faith is to shut the eye of reason." - Thomas Paine

    by shrike on Tue Jul 30, 2013 at 02:12:52 PM PDT

    •  It also connects to the fairly recent SCOTUS (8+ / 0-)

      decision on eminent domain. I'm not a lawyer and I am sure there would be suits with many ins and outs to them if this programs actually happened. At the very least it is a challenge to the banks to act like responsible citizens or face some serious headaches.

      It seems highly improbable that the banks are ever going to recover the value of the original mortgage. If they thought they could they would have foreclosed and sold the properties. What they are doing is playing accounting games in an effort to avoid the financial implications of having to write them to market value.

      •  In a way they have been written to market. (6+ / 0-)

        But that is not the issue here since balance sheets of financial institutions are not of concern.

        The main thing is that a city has not only the right but also the obligation to preserve its community and tax base.

        For example, an ecological disaster could afflict a city and ruin property values.  Some sort of community adjustment from owners would be appropriate there as well.

        "The way to see by faith is to shut the eye of reason." - Thomas Paine

        by shrike on Tue Jul 30, 2013 at 02:38:52 PM PDT

        [ Parent ]

      •  Yes, under the Kelo decision. (3+ / 0-)
        Recommended by:
        shrike, Richard Lyon, ColoTim

        Smart use of law.

      •  if this program is like others that have (1+ / 0-)
        Recommended by:
        ColoTim

        been proposed, the idea is to cherry pick the performing mortgages, ie the ones that the bank can't foreclose on.

        •  Thank you johnny wurster. (1+ / 0-)
          Recommended by:
          ColoTim

          For being on this site.

          •  thanks. (1+ / 0-)
            Recommended by:
            ColoTim

            I'll note that I'm here for entirely selfish reasons: it's a good place to test out arguments and see which ones fly.  while there is a lot of echo chamber idiocy, there are also some smart people that can serve as the sort of crucible that arguments and ideas need.

            •  I wish there were another site though (0+ / 0-)

              with similar ease of use but a much better ratio of, let's say, open to closed-mindedness. So many here have a firmly established point of view, usually self-serving, and have little to no interest in hearing alternative points of view. You'd think some would question things like what is espoused in this diary - if it were such a great idea, why wouldn't all municipalities do it for all mortgages? Obviously, there are some negatives mixed in with the positives. But some are actually angry that anyone would deign to rain on the parade with alternative scenarios.

              •  yeah, I don't think there are better sites. (1+ / 0-)
                Recommended by:
                doc2

                there are some very, very smart people here.  its just a matter of keying into them and ignoring the firebaggers.

                I'm not sure Kelo was a terrible decision, but it has to be limited to its facts, as we law talking guys say.  ie, its a dead letter.  even the majority agreed that merely transferring property from A to B isn't a public use, and that's what we have here.  I assume other cities haven't done this because the lawyers know it would be shot down and because it would harm lending in the area.

        •  Actualy, I would go the other way (2+ / 0-)
          Recommended by:
          KenBee, ColoTim

          I would start with a few unoccupied and decaying properties.  It will be easier to make the argument in court that they are blighting the neighborhood.  

          Of course, the mortgage holder would need to prove ownership of the lien which many of them cannot.  Would this mean that they would not actually own the property?  

          If you go that route, there needs to be some groundwork legislation.  The city could require that mortgage holders properly notify the city when they foreclose (http://hastingsbanner.com/...).  As I understand it, often mortgage holders often fail to.  There should be significant penalties for failing to register properties.  This will make eminent domain actions easier later on.

          I'm a 4 Freedoms Democrat.

          by DavidMS on Tue Jul 30, 2013 at 07:55:18 PM PDT

          [ Parent ]

          •  Especially if nobody is paying taxes. I've read (1+ / 0-)
            Recommended by:
            AoT

            here that banks will go through 90% of the eviction process and not finish so they don't hold the property title, but the person has been evicted and the property is vacant.  The borrower, because the title is still in their name, still owes the taxes, which they don't know and shouldn't, because they can't live there anymore.

            I think that would help Richmond's case if they can find those types of properties.

    •  no public use here. (0+ / 0-)

      they're just taking from investors ans redistributing to individuals.  there may be public good incidental to that, but it creates private good first and foremost.

      and on top of that there are the valuation issues, which are themselves interesting and contestable.

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