We have heard reams of discussion and impassioned arguments for and against the notion of using eminent domain to seize mortgages for the purpose of somehow solving the foreclosure crisis. But what is eminent domain really for? The government reserves its right to seize private property for the greater public good. This may mean things like schools, roads, airports, and similar land uses.
But mortgages? We're not talking about the ground itself, but the underlying financial instrument that is a civil contract between two private parties - lender and borrower. Putting aside the sense that this is an irresponsible, unethical and painfully overreaching use of eminent domain, it seems that the math doesn't add up either.
Our friends at the Inland Valleys Association of REALTORS® have put together pages of data and news on eminent domain. Just for example, maybe the eminent domain proposal cannot actually help those homeowners most in need and most at risk of losing their homes.
Or is that the private company that proposed this scheme may stand to profit up to 30 percent profit, after paying 80 cents on the dollar for these loans seized by the government. Nice money if you can get it - but whom does it really help?
Stay tuned for more information on the use and abuse of eminent domain as it applies to your mortgages.
