Unconventional Use Of Eminent Domain Threatens Property Right
By: California Alliance to Protect Private Property Rights
To address the issue of underwater mortgages, the San Bernardino County Board of Supervisors has embraced the unprecedented and untested use of eminent domain to forcibly seize mortgages from lenders and restructure them at current market rates.
This scheme, hatched by investment firm Mortgage Resolutions Partners (MRP), robs Peter to pay Paul, while giving the illusion that homeowners have been saved from foreclosure at no cost to anyone. This is false.
Mortgages are secured by 401Ks and pension plans, and, according to theWall Street Journal, this scheme puts roughly $7 billion in mortgage-backed securities at risk in San Bernardino County alone.
So the County is simply picking winners and losers among their constituents by embracing a plan that shifts the cost of saving underwater mortgages to current and future retirees, most of which have sound mortgages.
This scheme is also bad for an economy that is dependent on a strong and vibrant real estate market, and a fluid credit market. New homebuyers may find getting a loan more difficult or more costly, as mortgage companies consider the risk of lending money in a County that seizes mortgages by eminent domain.
This plot embraces the notion that that Americans do not hold any private property rights; they simply possess property until government decides to take it. This false interpretation means that in addition to government seizing homes by eminent domain, financial assets are also fair game, with no limits or boundaries between right and wrong.
Everyone is concerned with limiting home foreclosures. However, the power of eminent domain was intended exclusively for public works projects, not to shift the burden of this mortgage crisis and bad economy from one to another.
It is time for the San Bernardino County Board of Supervisors to retreat from a plan that introduces a new level of government intrusion in private markets that is bad for consumers, threatens financial institutions and retirement plans, and is ripe for abuse and corruption.
Before this unprecedented scheme is adopted elsewhere in California, please urge ALL members of the San Bernardino County Board of Supervisors to abandon this clear case of eminent domain abuse.
For more information visit CalPropertyRights.com ■
Return to the Losing the Family Farm index
Home | Top