A big portion of the country's mortgages are underwater, which means more is owed on the loan than the house is worth. However, a California company has a novel repair in mind, which requires local governments using the power of eminent domain to force a refinance.
Considered very controversial
There is one power that has been debated a lot by the federal, state and local government authorities called "eminent domain." This is the right for the government to compensate any homeowner for loss of property and seize the property as long as it is for "public good," or if it would be detrimental to public welfare to not take the land. This is just one of the many debated government powers.
A number of people think that eminent domain is an abuse of power and should not be allowed, although it is generally used to put in highway extensions and other things, according to NJ.com. There was one landowner who had 1-acre of land taken with eminent domain by the city of Hoboken. Even though the land was valued at $10 million, they only gave him $2.3 million, and the land was being used to put in a park.
One good way to use it
Reuters explained that one good idea came from California-based company Mortgage Resolution Partners. The concept would help get rid of the mortgage loans individuals have by using eminent domain. Normally, the home is considered "condemned" when this takes place, but MRP wants it to happen with the loans instead.
According to Zillow, about 31.4 percent of the homes in the nation are underwater, and CoreLogic estimates that number to be at 22 percent. No matter how you look at it, there are a number of people who owe more money on their home than it is worth. MRP thinks that private investors should put cash in to pay off the loan for homeowners and then have the properties seized at fair industry price paid to the bank. That would be lower than the purchase price. MRP's job would be to sell the loans to new investors which would lower the mortgage borrower's payment.
The action would be funded by investors, which means the only government involvement in California would be to turn in the eminent domain paperwork. There would be no taxpayer dollars used.
Still not in place
Even though the bill has been well-received in some areas, it has already been turned down by the Hesperia city council, according to the Hesperia Star. This is despite the truth that 50 percent of homeowners in the city have underwater home loans. Since California has been hurt a lot by the decreased home values, many people in California are really looking forward to the plan. MRP has talked to a ton of local government authorities about this already. Remember, it is just a proposal at this time.
Despite the truth that a lot of people are underwater, a ton of them are still paying on their payments, according to CNN. The Zillow survey showed that 90 percent of underwater home proprietors are still making payments regularly. It is very dangerous for a homeowner to own more than the home is worth because they could end up in foreclosure.
Considered very controversial
There is one power that has been debated a lot by the federal, state and local government authorities called "eminent domain." This is the right for the government to compensate any homeowner for loss of property and seize the property as long as it is for "public good," or if it would be detrimental to public welfare to not take the land. This is just one of the many debated government powers.
A number of people think that eminent domain is an abuse of power and should not be allowed, although it is generally used to put in highway extensions and other things, according to NJ.com. There was one landowner who had 1-acre of land taken with eminent domain by the city of Hoboken. Even though the land was valued at $10 million, they only gave him $2.3 million, and the land was being used to put in a park.
One good way to use it
Reuters explained that one good idea came from California-based company Mortgage Resolution Partners. The concept would help get rid of the mortgage loans individuals have by using eminent domain. Normally, the home is considered "condemned" when this takes place, but MRP wants it to happen with the loans instead.
According to Zillow, about 31.4 percent of the homes in the nation are underwater, and CoreLogic estimates that number to be at 22 percent. No matter how you look at it, there are a number of people who owe more money on their home than it is worth. MRP thinks that private investors should put cash in to pay off the loan for homeowners and then have the properties seized at fair industry price paid to the bank. That would be lower than the purchase price. MRP's job would be to sell the loans to new investors which would lower the mortgage borrower's payment.
The action would be funded by investors, which means the only government involvement in California would be to turn in the eminent domain paperwork. There would be no taxpayer dollars used.
Still not in place
Even though the bill has been well-received in some areas, it has already been turned down by the Hesperia city council, according to the Hesperia Star. This is despite the truth that 50 percent of homeowners in the city have underwater home loans. Since California has been hurt a lot by the decreased home values, many people in California are really looking forward to the plan. MRP has talked to a ton of local government authorities about this already. Remember, it is just a proposal at this time.
Despite the truth that a lot of people are underwater, a ton of them are still paying on their payments, according to CNN. The Zillow survey showed that 90 percent of underwater home proprietors are still making payments regularly. It is very dangerous for a homeowner to own more than the home is worth because they could end up in foreclosure.
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