Do you think San Bernardino County’s loan cramdown-by-seizure plan for underwater homeowners will help the real estate market?
No (72%, 118 Votes)
Yes (28%, 46 Votes)
Total Voters: 164
A case for one county’s use of eminent domainThe right of the government to take private property for public use. The government must pay the owner the fair market value of the property taken. to help underwater owners, despite anti-cramdownThe reduction of the principal balance of a loan. In first tuesday context, cramdowns are a tool used to provide debt relief for underwater homeowners. smokescreens launched by the opposition.
Repurposing an old sword
The San Bernardino County Board of Supervisors voted unanimously to approve a first-ever plan to seize underwater mortgages (yes, mortgages) through court ordered eminent domainThe right of the government to take private property for public use. The government must pay the owner the fair market value of the property taken.. Congress could not instigate similar curative actions, and now San Bernardino County is stepping up to the plate in its own bold and unorthodox way. Cue the Homeownership Protection Program!
The county is desperate to keep residents in their homes and increase homeowners’ disposable income. If implemented, this proposal to stimulate the local economy by reducing the debt burden carried by its underwater residentsis threefold:
“condemn” home loans on negative equityThe condition of a property owner owing more on a mortgage than the current fair market value of the encumbered property. properties;
take “possession” of these loans; and
renegotiate the loans with homeowners to principal amounts at or below the home’s fair market value (FMVThe price a reasonable, unpressured buyer would pay for property on the open market.).
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is the writing staff comprised of legal editor Fred Crane, In-House Broker Consultant Fernando Nunez and writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Jeffery Marino, Carrie B. Reyes, Sarah Cantino, Matthew Taylor and Matthew Shade.