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View Diary: Can a Small California City Take on Wall Street - And Survive? (298 comments)

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  •  I'm not "defending" anyone. (6+ / 0-)

    I'm a lawyer, so I weigh in where I have some expertise -- the law.  Explaining the law is not "defending" anyone.  

    Any solution has to comply with the law.  Or you have to pass a new law.  

    If California law limits eminent domain to real property (as I said, a Court is going to have to address that), theoretically California could pass a law allowing the seizure of mortgages for FMV.   Nothing in the 5th Amendment would prohibit that, I think.  

    That would, however, make mortgages in California more expensive and harder to get, as it would increase the risk to lenders.  

    There's no such think as a "free lunch," where nobody pays.  If you push additional risk on to banks, they are going to pass that along in the form of increased payment for the increased risk.  You can certainly make the policy decision that it is worth it to deal with more expensive, and much harder to get, mortgages (and the attendant drop in property values that accompanies that kind of thing) in exchange for helping underwater homeowners.  That's a policy decision.  All I advocate is that, when people make these policy decisions, they are aware of all the consequences -- even the unintended consequences.  

    •  *Especially* the unintended consequences (0+ / 0-)

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Sep 15, 2013 at 01:05:21 PM PDT

      [ Parent ]

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