Irvington Mayor Wayne Smith was taking credit for a housing boom in 2006, now he can take credit for stealing property via Eminent Domain.
The AP reported that the Irvington NJ Mayor, Wayne Smith, intends to use Eminent Domain to take over underwater mortgages that are in foreclosure, presumably give them back to people who lost their homes. That would leave the owners of the mortgages to bear the entire burden of the loss in equity.
There is no guarantee that the people who lost their homes would be able to afford them or move back into them in cases where they’ve already moved out.
He plans to hire a third party to buy up the mortgages.
Mayor Smith said Irvington’s plan would focus on “private label” security mortgages, or ones that are not backed by the U.S. government.
The city will try to avoid litigation with “friendly condemnation” – they will offer incentives to the mortgage owners if they agree to avoid litigation.
The NJ ACLU is all for it. No surprise there!
Wall Street and real estate groups are strongly opposed.
No bank or mortgage company will want to loan money in Irvington knowing that they can have their property stolen by the government on a whim.
Richmond, California considered a similar plan but a lawsuit has halted their plans. Other municipalities including one on Long Island have also considered the idea.