Photo of Robin Marx Hood, the new face of our government
Richmond California is going to steal foreclosed homes from investors and turn them over to a mortgage resolution specialist who might arrange for former owners to buy them or live in them for rent.
The courts have interpreted the 14th Amendment of the U.S. Constitution (1868) as giving the government far more “eminent domain” power than was originally intended.
Under the rubric of “eminent domain,” various zoning regulations, land use regulations by the Bureau of Land Management, property taxes, and “environmental” excuses, private property rights have become very diluted.
Private property is seized almost every day in this country under the “forfeiture” provisions of the RICO statutes and the so-called War on Drugs. In the case of Kelo v the City of New London, the government was allowed to seize private waterfront property from a homeowner to turn it over to another private concern for use as a hotel among other things.
Now we can add the destruction of securitization markets through theft of property as another inappropriate use of Eminent Domain.
Richmond California is considering a plan to seize foreclosed properties from banks representing bond investors, giving the investors who owned them a reduced amount of compensation.
The city would then reduce the loan balance and refinance the mortgage, resulting in a lower mortgage payment for the borrower.
Variations of the idea have been considered in four other California cities, Philadelphia, and in Long Island, New York.
Because a bank or investor owns the property, they seem to think it is okay to steal it.
The government will not manage the deal themselves. They will turn the stolen properties over to a private concern who will then sell or manage the properties seized and who will stand to benefit in what can only become a corrupt enterprise. The name that always comes up to manage these deals is Mortgage Resolution Partners which operates out of San Francisco.
Mortgage Resolution Partners are wheeling and dealing their way into town after town.
City leaders in Richmond began sending letters last week to mortgage companies seeking to purchase loans on 624 properties and threatening to force sales via eminent domain if investors resisted.
This is redistribution of wealth and it also redefines the meaning of private ownership of property.
The plan is allegedly based on good intentions, but it is stealing no matter how one looks at it. The government is taking advantage of all the wealth-envy that is rampant in this nation. Stealing from anyone is government run amok.
It puts the entire hit for underwater homes on the people who loaned the money, who hold the mortgage, and who are actually the owners.
Who will ever mortgage a property in any of these towns again? It will probably bankrupt small lenders. Others who live in these neighborhoods will find their properties devalued because who will give new buyers a mortgage to buy their home?
If we keep allowing the government to abuse Eminent Domain under the guise of the common good, we will all find ourselves without property one day.
There is little recourse. The owners – investors – in these properties are suing on the grounds that it is unconstitutional, but legal advocates say it won’t hold up.
SCOTUS has not been on the side of private ownership over Eminent Domain. The government can do anything it wants.
Labor leaders and community organizers love the plan, but that’s no surprise, they tend to be socialists, and redistribution of wealth is their creed.
So much for the American Dream.
Full story at the Wall Street Journal