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Posted: 7/5/2012 7:58:03 AM EDT
[#1]
Quoted:
I'm sure the mortgage has language about what happens in the case of eminent domain.[/div] The WSJ article suggests they're seizing the loan, not the property. The municipalities, about 45 minutes east of Los Angeles, would acquire underwater mortgages from investors and cut the loan principal to match the current property value. Then, they would resell the reduced mortgages to new investors.
BTW, this is why you shouldn't own any State of California bonds. Right now the California constitution places bond payments ahead of almost everything else, but if push comes to shove the people of California will simply vote to change it and stiff creditors. The people of California are deadbeats and bad credit risks. |
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Posted: 7/5/2012 7:59:05 AM EDT
[#2]
Quoted:
Who is John Galt? Well he sure is not most here |
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Posted: 7/5/2012 7:59:16 AM EDT
[#3]
Quoted: Google that sentence and click through the link on google. it shows the full article without logging in. It's a loop hole to site subscriptions that they have to do or they won't get in the search engines.From the linked article: "A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth." Can't read the whole article. Does it mention what cities? |
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Posted: 7/5/2012 7:59:51 AM EDT
[#4]
Quoted:
Quoted:
Yes, I'm sure most home owners will be able/willing to go to court and fight for the just compensation for the house they were just kicked out of. It's not like they'll be spending any time or money on finding a new place to live, moving, etc.  I got from the article (admittedly, I just skimmed it)...that the Owners aren't being kicked out...their bank/mortgage holder is......basically taking the owner of an 'upside down' mortgage and giving him a mortgage at current market value....i.e...a bail out. AFARR Rereading the article, I did a poorer job at skimming it than you did. 
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Posted: 7/5/2012 8:00:15 AM EDT
[#5]
Quoted: Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion  Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. |
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Posted: 7/5/2012 8:03:01 AM EDT
[#6]
Quoted:
Quoted:
Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! |
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Posted: 7/5/2012 8:04:58 AM EDT
[#7]
Quoted:
Quoted:
Quoted:
Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! And in other news, personal income rose dramatically in california, another sign of economic recovery....... |
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Posted: 7/5/2012 8:06:10 AM EDT
[#8]
From what I understand, the glut in in foreclosed homes has never been remedied by the note holder (banks) letting the market determine the asset price. The banks can't take the losses because they will then be insolvent. The government backstopped the banks, and continues to backstop banks (ZIRP, QE, etc), and the assets still sit on the books.
If the tidal wave of foreclosures ever is allowed to hit the market, there will be an instant devaluation in home pricing, bank foreclosures and who knows what else? Probably insurance companies too, as well as local governments, public schools, etc. Lets just get it over with and rip the bandaid off already. |
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Posted: 7/5/2012 8:09:59 AM EDT
[#9]
Quoted: Quoted: Quoted: Quoted: Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! And in other news, personal income rose dramatically in california, another sign of economic recovery....... LOL! |
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Posted: 7/5/2012 8:10:01 AM EDT
[#10]
Quoted:
Quoted:
Quoted:
Quoted:
Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! And in other news, personal income rose dramatically in california, another sign of economic recovery....... 
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Posted: 7/5/2012 8:11:25 AM EDT
[#11]
Quoted: From what I understand, the glut in in foreclosed homes has never been remedied by the note holder (banks) letting the market determine the asset price. The banks can't take the losses because they will then be insolvent. The government backstopped the banks, and continues to backstop banks (ZIRP, QE, etc), and the assets still sit on the books. If the tidal wave of foreclosures ever is allowed to hit the market, there will be an instant devaluation in home pricing, bank foreclosures and who knows what else? Probably insurance companies too, as well as local governments, public schools, etc. Lets just get it over with and rip the bandaid off already. California real estate is so fake, it needs a crash. You've got 50 year houses in original condition that were selling in downtown San Jose for $350,000. And the ads in the paper read "Fixer up! Great discount price!" |
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Posted: 7/5/2012 8:13:35 AM EDT
[#12]
Quoted: Ah! Thanks.Quoted: Google that sentence and click through the link on google. it shows the full article without logging in. It's a loop hole to site subscriptions that they have to do or they won't get in the search engines.From the linked article: "A handful of local officials in California who say the housing bust is a public blight on their cities may invoke their eminent-domain powers to restructure mortgages as a way to help some borrowers who owe more than their homes are worth." Can't read the whole article. Does it mention what cities? Okay what they are doing, I think, is the homeowner approaches this lender that is incahoots with .gov to see if they could reliably make the payments if the mortgage was slapped down to whatever the "current market value" is v. what they borrowed. The new finance company then pays the original mortgage company only this lower amount of the fair market value, extinguishes the original mortgage and issues a new mortgage for the lower amount. It does not sound to me like something that would normally work as 'eminent domain" but the article has some Supreme Court decisions of, what seem to me, odd decisions upholding ED takings. |
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Posted: 7/5/2012 8:15:00 AM EDT
[#13]
Quoted: Quoted: Quoted: Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! I bet it would not be income because the debt is not being forgiven, it is being extinguished through a legal proceeding. Discharged bankruptcy debt is not taxable income, the 1099 even has a section to check for bankruptcy. |
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Posted: 7/5/2012 8:16:07 AM EDT
[#14]
Quoted:
Quoted:
Quoted:
Quoted:
Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! I bet it would not be income because the debt is not being forgiven, it is being extinguished through a legal proceeding. Discharged bankruptcy debt is not taxable income, the 1099 even has a section to check for bankruptcy. This ain't bankruptcy, though. The bankruptcy power lies with the federal government, a state eminent domain proceeding ain't gonna cut it. |
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Posted: 7/5/2012 8:23:31 AM EDT
[#15]
Eminent domain means a government taking for fair market value.
So in this scenario, a city takes a mortgage note for FMV. Let's assume a $100,000 house with $120,000 owed on the note, and that the city pays the mortgage holder full value for what's left on the note. The city now has a note and a lien on a $100,000 house for which it paid $120,000. What are they going to do at this point? Forgive the homeowner's $120,000 debt in exchange for a $100,000 note from the homeowner, issue the homeowner a 1099 for $20,000, and sell the note for $90,000. City loses $30,000 grand on the deal less city income tax paid on the 1099. So basically, it's a miniature, tax funded, bailout for homeowners. What purpose does that serve? What happens when property values drop again? Is this program going to available to everyone in the city, or just people of a certain income level? How about owners of rental properties? |
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Posted: 7/5/2012 8:23:55 AM EDT
[#16]
Quoted: Every asshat and his brother was buying houses to sell. Yup. When there are TV shows about regular Joes quitting their jobs to make it rich in X, then you know X has a horrific downturn coming. |
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Posted: 7/5/2012 8:25:20 AM EDT
[#17]
Quoted:
Eminent domain means a government taking for fair market value. So in this scenario, a city takes a mortgage note for FMV. Let's assume a $100,000 house with $120,000 owed on the note, and that the city pays the mortgage holder full value for what's left on the note. The city now has a note and a lien on a $100,000 house for which it paid $120,000. What are they going to do at this point? Forgive the homeowner's $120,000 debt in exchange for a $100,000 note from the homeowner, issue the homeowner a 1099 for $20,000, and sell the note for $90,000. City loses $30,000 grand on the deal less city income tax paid on the 1099. So basically, it's a miniature, tax funded, bailout for homeowners. What purpose does that serve? What happens when property values drop again? Is this program going to available to everyone in the city, or just people of a certain income level? How about owners of rental properties? I am sure fannie or freddie will backstop this and fdic will cover the losses from the derivatives that will be sold based on these transactions... |
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Posted: 7/5/2012 8:32:53 AM EDT
[#18]
Quoted:
Quoted:
Who is John Galt? That about sums it up. Yes, because it's been shown time and time again, whatever stupid, fucked up stuff the layers of government in California inflict on their citizens is soon forcibly applied to the rest of the nation. And Galt was a character in an incredibly pretentious and boring book. |
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Posted: 7/5/2012 8:35:11 AM EDT
[#19]
Kelo was yet another fucking stupid decision where the court apparently decided it would not "save" individuals from the "political choices" of the majority. Fucking douchebags.
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Posted: 7/5/2012 8:37:40 AM EDT
[#20]
Quoted: There is still no debt forgiveness, the debt was disappeared! by the government. It would still create a nightmare for them with the IRS though. Quoted: Quoted: Quoted: Quoted: Just because they remove the lien rights to the propery, it doesn't remove the borrower's obligation on the note. The loan is just no longer secured and the borrower would stil have to pay the remaining unsecured portion Or the lender could go NUCLEAR and issue a 1099. Let's see how asshat likes getting a $450,000 increase in salary for this year. I'm pretty sure that would happen if the city took the note anyways. Congrats! The city just forgave a huge chunk of debt, which is now income to you! I bet it would not be income because the debt is not being forgiven, it is being extinguished through a legal proceeding. Discharged bankruptcy debt is not taxable income, the 1099 even has a section to check for bankruptcy. This ain't bankruptcy, though. The bankruptcy power lies with the federal government, a state eminent domain proceeding ain't gonna cut it. |
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Posted: 7/5/2012 8:37:54 AM EDT
[#21]
Quoted: Kelo was yet another fucking stupid decision where the court apparently decided it would not "save" individuals from the "political choices" of the majority. Fucking douchebags. Yup |
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Posted: 7/5/2012 8:55:38 AM EDT
[#22]
Quoted:
Quoted:
Kelo was yet another fucking stupid decision where the court apparently decided it would not "save" individuals from the "political choices" of the majority. Fucking douchebags. Yup Can I emmigrate to Zimbabwe now? It sounds mroe politicaly stable... 
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Posted: 7/5/2012 8:55:54 AM EDT
[#23]
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Quoted:
Wow.....and Im sure they will whine and cry when no bank ever offers anyone inside their city limits a mortgage ever again. Contracts must be honored. If we let governments start ignoring them on a whim, they stop being worth the paper they are printed on, and the level of uncertainty that introduces into a financial system is incredibly destructive. The banks will be forced to keep giving mortgages if they want to operate in the state. Wouldn't put it past them. Or they could just tax them for not offering mortgages. |
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Posted: 7/5/2012 9:41:26 AM EDT
[#24]
Quoted:
Eminent domain means a government taking for fair market value. So in this scenario, a city takes a mortgage note for FMV. Let's assume a $100,000 house with $120,000 owed on the note, and that the city pays the mortgage holder full value for what's left on the note. The city now has a note and a lien on a $100,000 house for which it paid $120,000. What are they going to do at this point? Forgive the homeowner's $120,000 debt in exchange for a $100,000 note from the homeowner, issue the homeowner a 1099 for $20,000, and sell the note for $90,000. City loses $30,000 grand on the deal less city income tax paid on the 1099. So basically, it's a miniature, tax funded, bailout for homeowners. What purpose does that serve? What happens when property values drop again? Is this program going to available to everyone in the city, or just people of a certain income level? How about owners of rental properties? Fair market value is not the balance on the note. FMV is whatever the city can convince a judge it is. Posted Via AR15.Com Mobile |
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Posted: 7/5/2012 9:52:59 AM EDT
[#25]
Interesting times.
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