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California Cities Considering (Legal?) Theft of Private Property
California Cities Considering (Legal?) Theft of Private Property
Courtesy of Dr. Paul Price at Beating Buffett
All Americans should be very, very alarmed. Today’s Wall Street Journal ran a front page story on a proposal put forth by Mortgage Resolution Partners LLC as a ‘solution’ to the problem of underwater mortgages. When you read their PowerPoint presentation for comprehension it is clearly threatening to all commonly perceived rights of private property and free will.
Here is their summary slide describing the program…
The essence of the plan is to force private owners of mortgages to sell them to Mortgage Resolution Partners LLC [MRT] under the guise of eminent domain. MRT would initially only ‘take’ mortgages that are underwater based on estimated market value but that are current on their payments [NOT in default].
This is MRP’s own description of which loans they intend to seize…
Non-defaulted but underwater mortgages are highly profitable to those holding the paper. Payments are being made as scheduled at interest rates generally well above today’s rates on similar mortgages. This would be similar to your holding an older non-callable 10-year CD or bond at a 7% annual interest rate. You would never want to give that up early except at a premium to face value.
The borrowers, by definition, have the ability to pay the monthly amounts due. That’s why they are not in default. The current market value of their homes has no bearing on their ability to pay the mortgage. That is a function of some combination of the borrower’s income and assets.
MRP would not only be confiscating highly desirable assets from private citizens or businesses but they’d also be setting artificially low prices as compensation.
The following are excerpted directly from MRP’s own PowerPoint.
Note the phrase “Neither under any compulsion to transact.” Eminent domain is the exact opposite. Holders of not in default mortgages would be forced to sell, period.
Not everyone is a mortgage lender. Many more investors own stocks. Imagine that someone could come along after a big stock market crash (such as Oct. 1987, Aug. 1998, post-Sep. 11, 2001, Aug. 2010, Oct. 2011 etc.) and determine you must sell them all your underwater shares, and at a discount to their already depressed market prices. In essence that would be an involuntary margin sell-out even if you were not on margin!
MRP will make money by seizing privately held mortgages through government action at “fair value” which MRP then defines as “significantly less than the fair value of the home.”
This is nothing short of the improper taking of private property against the will of the holder of said property.
Favored (politically connected?) borrowers who are financially able to keep paying their mortgages as promised contractually will get principal reductions (free money) at the expense of those who entered into valid contracts with them. Can you say “involuntary transfer of wealth?”
MRP likes to say:
Consider this…
The windfall profits of the ‘lucky’ homeowners who receive principal reduction will likely not be taxed. While MRP implies that the forgone tax receipts would not be used for purchase of boats, cars or other non-necessities there would be no possible way to enforce this. Money is fungible.
When taxes are forgiven for one group of taxpayers all other taxpayers must pay more to make up the difference.
MRP is offering ipso facto ‘bribes’ to government entities and charities to induce their participation in this scheme. OPM [confiscated from the original lenders] is always welcomed by these groups.
How bad will the ‘Fair Pricing” of the non-defaulted loans be for those forced to sell them? Bad enough to provide funding for MRP’s employees, MRP’s fees, all legal expenses, all debt forgiveness, all forgone future interest payments and money enough to ‘share’ with local government agencies and/or charities.
Once the fiscal rape of the original mortgage holders is completed… newly created, now very attractive MBS would be shopped to private investors who would profit from the value taken away from the rightful owners of these debts.
Didn’t private mortgage holders have a lot of MERS-related issues? Yes. For MRP though, these will be totally ignored and set aside.
To Summarize:
1. Highly profitable, non-defaulted mortgage loans will be involuntarily confiscated from their legal owners through eminent domain.
2. The owners of the ‘condemned’ loans will have no legal rights of refusal other than to challenge the ‘fair values’ after the fact- at great legal expense.
3. A small subset of underwater borrowers who are not in default and able to pay their monthly mortgageswill be rewarded with principal and future interest write-offs.
4. These ‘lucky’ borrowers will almost certainly pay no federal or California income taxes on their windfall profits due to this program.
5. Mortgage Resolution Trust will collect enormous fees for their administration of this dubious project.
6. Private investors (other than you and me) will be permitted to buy newly issued, highly desirable revalued to current market price MBS.
7. MERS problems unilaterally and quickly disappear.
8. Privately held Home Equity Lines of Credit [HELOCs] and second mortgages are extinguished in most cases with no chance for recovery.
9. Government programs and/or charities will share the wealth to encourage their participation in these unprecedented takings of privately held assets.
Stop this insanity. Demand a return to rule of law before it disappears entirely.
Dr. Paul Price
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Exactly.
The Supine Court already sanctioned theft of private property for profit in the Kelo decision.
This is simply the deployment of the weapon that was already built and stamped with the SCOTUS seal of approval.
LOL, yeah because most Americans know what the fuck a Kelo Parlor or Foxwoods is.
The median income in the US is $26,000. It must be fun to be out of touch.
Oh yeah, $200-250,000 ain't rich too. *rollseyes*
If such a precedent is set, what lender will ever write a mortgage on any California property, except at rates that reflect the chance of forced forfeiture? But that cost will be borne by future generations, so party on, dudes!
We should all do the Zorba -- stop paying all debts and taxes and let the banking cabal eat shit.
Lenders will write mortgages as fast as they can as long as Fannie and Freddie take the paper off their hands immediately after closing. No lender today holds the paper. It is all about the origination fee income. Lenders will write mortgages all day long as long as the Feds will take them.
This is in fact a solution that helps clear up many issues for TBTF. First of all notes are seized and paid off en masse and lenders receive higher than courthouse steps auction prices. The homeowners are refi at cram down in a full recourse loan and new debt holders get repaired contract/title with no MERS or other issues.
Once the ability to strategic default is cured the remainder of homes in foreclosure with title/mers issues will simply be eminent domain and dumped onto a market which will finally find its bottom.
See, the banks will be fine!
It's all just a big circle jerk ...
"and go round, and round, and round in the circle game"
- Joni Mitchell
With no Happy Ending for the homeowner.
You act as though the mortgagors are innocent puppies in this situation. Not at all, they CAUSED THE WHOLE FUCKING MESS. There would BE NO UNDERWATER HOMES without them. Get it?
Whatever remedy the state imposes on them is fine with me. Finally, something like JUSTICE.
Don't fall fo rthe narrative.
The mega banks run the show, they tell you how their tyranny is gonna help you right before using it to rip off your face.
If anyone wanted to go after the mega banks and hold them accountable, there are plenty of fraud statutes to do so.
These SOBs are Machiavellian... don't be played for the Muppet.
The Ultimate History Lesson: http://www.youtube.com/playlist?list=PL463AA90FD04EC7A2The Ultimate history Lesson Commentary: https://www.tragedyandhope.com/th-films/the-ultimate-history-lesson/comm...
Yep, was thinking that as well. There's gotta be a way that (back door) there going to profit off this anyway, and what better way than under the guise of - "get Mr. banker".
Why the downgrades?
Definition of MORTGAGOR : a person who mortgages property Banks tooka risk. They lost.Those holding non-defaulted mortgages did not lose.
Their assets are being stolen by third parties with no right of refusal.
Another solution to deal with the banks, fed and FHA would be to waterboard the officers.
Salsa board them.
I was thinking car batteries and blow torches, but my mind tends to wander.....
"Non-defaulted but underwater mortgages are highly profitable to those holding the paper.
...
Highly profitable, non-defaulted mortgage loans will be involuntarily confiscated from their legal owners through eminent domain."
Umm, rule changes suck. Eminent domain is one of the most extreme. Localities are going to protect what they have. Think Stockton, Vallejo, et al. It would appear that it's only just begun.
From my post recently:
From the WSJ article:
"For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program's private financiers would fund the city's seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors."
Based on the article, this is a forced write-down on the current holders of the notes.
I'd be a seller of any and all MBS with CA mortgages in them...just in case.
http://www.zerohedge.com/news/next-imminent-bailout-eminent-domain
holdbuysell
Guess the Communist state of Kali has no HOMESTEAD CLAUSE.
I'm still scratching my head at the part where they seize a debt ... I get eminent domain on a property, but on a contract?
They tried to foreclose on a dudes home the first part of this week, He told them no WAY,if you try you die. They came(the bank,LE,etc) they all were shot five dead,incuding homeowner in default.
This is outright theft.
If a man is not behind on his payments,they cannot seize the property,unless there is a clause for the owner/buyers, to call the entire note due upon demand.
If he wishes to continue to be upside down, and pay, that's his business.
Just like automobiles.
Think like a lawyer, dude. A contract is property the same as a copyright on a book or a patent on a process is property. You can buy/sell a copyright or a patent. They can even be emminently domained--think: a copyright on a book about, or a patent that covers, the construction of free energy technology, and then here comes a politician with ED (yes, that's adouble entendre for the more cleverly minded) and <POOF>, it's gone!
Soooo, why not a contract? Same difference.
I am Chumbawamba.
Agreed. The mortgage may be worthless, but the borrower still owes on the note to the original lender.
What if mortgage insurance paid off the note due to default? The bank is paid, so shouldn't the insured own the property? Since insurance is based on need so I think their is a valid arguenment to be made here.
Yea. You owe MERS. Wait, who is MERS? Who holds the note? F--- the banks.
So many great lines in the example, it's hard to know where to begin. How about "If a judge agreed..." Do you really think in a scam like this the judge isn't on board with TPTB? You can mark him Bought and Paid For.
"Private financiers would fund the city's seizure of the loan..." "Private financiers" sounds so much nicer than "Insiders," doesn't it? But why would the city need external financing to seize funds anyway? This is just another way to cut their friends in on the deal.
"That would leave $25,000 in profit..." You gotta love it. They designate a small portion of the theft as "profit," and then pretend that the "origination costs" would come out of those very reasonable margins. Heads up, people: There are no loan origination fees in a crime like this.
Finally, so confident are they of their impunity, they actually name the perpetrators: "the city, Mortgage Resolution Partners and its investors." But don't expect to see any of these co-conspirators on a Wanted poster.