BY Donna Westfall
Taxpayers have spent hundreds of billions of dollars to prop up banks, but the Obama administration has frustrated homeowners facing underwater loans and foreclosure by his refusal to offer a broad based plan to bail them out.
In a unique plan to help the situation, cities like San Bernardino, Detroit, Sacramento, Chicago and New York’s Suffolk county are looking at a plan involving emminent domain.
Here’s why. In San Bernardino County alone, more than half of all homeowners are underwater, and the foreclosure rate is three-and-a-half times the national average. Everyone knows someone that has lost their home or is in danger of losing their home.
Traditionally, emminent domain involves the taking of private land by the government for. In this instance, there’s a twist. Instead of private land being taken by the government for public purposes, this plan calls for seizing the loans by the government. Unique. It gets even more interesting.
Ben Hallman at the Huffington Post.com on September 1, 2012, writes abut a plan proposed by a San Francisco-based venture fund Mortgage Resolution Partners, which calls for government authorities to seize the mortgages of underwater borrowers, paying the investors that own them a fraction of what they are owed, using money borrowed from the fund. Homeowners could then refinance with a federal loan at a much lower rate, based on what their home is actually worth instead of what they owe.
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