Some bad ideas have come out of California, but the notion of using eminent domain to seize mortgages from private investors is one of the worst.Related: Obama's Midas Touch...Not So Much
The cities of Fonatana and Ontario and San Bernadino County were all thinking about such a plan, but have been warned off by nearly 20 banking, securities and housing groups from proceeding.
"We believe that the contemplated use of eminent domain raises very serious legal and constitutional issues," the letter said. "It would also be immensely destructive to U.S. mortgage markets by undermining the sanctity of the contractual relationship between a borrower and creditor, and similarly undermining existing securitization transactions," The letter representing the institutions claimed.
Saturday, July 14, 2012
Eminent domain for mortgages is eminently stupid: