Monday, June 25, 2012

San Bernardino Taking A New Route with Eminent Domain

Eminent Domain is where the government, local or otherwise, can take over a property to use for city/local purposes. They have to pay the homeowner fair market value of course, but they can take it. Think Freeway Expansion back in the day.

San Bernardino county is thinking along those lines for mortgages. Very interesting I say! L.A. Times has some good stuff, this one caught my eye today.

It was approved by their county Board of Supervisors last week, titled Homeownership Protection Program and they are also working with the cities of Ontario and Fontana.

What does this have to do with Santa Clarita you say? Well, nothing right now. But, it is an interesting concept for a small suburb that has enough money to invest within. Do we?

S.B is using private funds from investors to obtain the underwater mortgages and then restructure them for the homeowners in those cities.

“Under this particular proposal, the county would use its eminent domain authority to condemn the mortgages on negative equity properties and that way the county would take possession -- would be the owner of the mortgages,” Wert (spokesperson for S.B. County)  said. “The mortgages could then be renegotiated at a lower amount.”

What I find most interesting is that ONLY homeowners that are CURRENT on their mortgages would be allowed to participate in the program. Seems, as we all know, that the majority of programs aimed to help with underwater homeowners are for those that are struggling and/or delinquent. Not the ones that are still paying their 30-50% underwater loans.

So, if we Santa Claritans could come up with something like this? What cha think??? Eminent Domain, what a novel concept for mortgages. At least they aren't taking the houses along with the mortgages!

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