California Cities Considering (Legal?) Theft of Private Property – Why Doesn’t This Surprise Me?
(Zerohedge) 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. ~~~~NNNNN~~~~
In essence, the Counties/Municipalities of California are considering using Eminent Domain to accomplish the final wave of destruction of the mortgage industry, by essentially STEALING those mortgages which are still performing (paying their payments) even though they are ”underwater” and thus not eligible for refinancing. Here are the four ways in which this would spell the destruction of middle class communities, and end of all mortgage business in the US -
1. By selectively stealing the performing mortgages from banks and investors, they will destroy the ”high quality” tranches of many Mortgage Backed Securities (MBS) which numerous banks are claiming as collateral against their capital requirements. This will have a massive cascade effect, as these MBS are both collateral AND revenue stream for the banks and investors…what the MBS-holders will be left with are the non-performing (defaulted and in-foreclosure) mortgages – in other words, a whole new brand of “toxic assets” will be created by this selective theft…resulting in a major banking crisis. In this way, it is a direct and willful attack on private property, despite the obvious consequences.
2. The municipal entities will not pay a dime for these properties – you, as a tax-payer, will do that for them, because they will raise the money to buy the NBS through Municipal Bonds – bonds which you, as the tax-payer guarantee. In essence, the municipal and union thugs will get ALL THE BENEFIT if it works, and you, the TAX PAYER, will shoulder all the costs, whether the scheme works or not.
3. By using Eminent Domain, the Counties/Municipalities gain direct control over the properties, so when these mortgages go into default (and many will), the properties will devolve directly upon the municipal entity who now owns the mortgage – not only does this create a massive conflict of interest, for the municipalities also run the courts where the foreclosure cases will be heard, but it also creates a very short path to the establishment of public housing areas, where privately owned neighborhoods once existed. There will be instant blight in the neighborhoods which they fundamentally change by this method, and the private property owners will have no recourse, as with other acts of Eminent Domain. This opens the door to a whole host of mis-management and outright fraud scenarios. Also remember that the elimination of private property is a priority to the communists – it is, in fact, the FIRST POINT of the Communist Manifesto – “1. Abolition of all Property in Land, and [the] application of all Rents of Land to Public Purposes”
3. By forcing private investors and banks to sell under the Eminent Domain mechanism, the municipalities will get to name their price, and thus will force all the MBS owners to take a major loss right up front. Then, the municipalities will obtain the revenue stream of the monthly payments, which will facilitate their continued operations in a massive deficit mode – in other words, they need the cash flow to avoid bankruptcy because of their huge unfunded liabilities. This will reward them for their prior acts of fraud and mis-management, and will in fact strengthen the position of those who have created the worst of the municipal budget messes.
And the warning is clear – if this passes in California, it will soon come to a near-bankrupt community near you. Even if you don’t owe a cent on your home, it WILL affect you, because it will affect your taxes, transform your neighborhood into a public housing area, and give power to the greedy and corrupt politicians who would love nothing more than a blank check with which to “fundamentally transform” your community.
WE HAVE BEEN WARNED