Gayle
McLaughlin, the mayor of Richmond, Calif., is threatening to use the city's
power of eminent domain to seize 624 mortgages from banks that are unwilling to
sell these mortgages to the city. This brazen attack on property rights and the
sanctity of contracts will ultimately harm the citizens of Richmond. This threat
is also the latest in a long string of governmental abuses that are undermining
the security of property rights in the United States.
Almost half of
the mortgages in Richmond are "underwater," where home owners owe
more on the mortgage than the current market value of the home. The city is
offering to buy the mortgages from banks at prices below the current market
value and then to work with Mortgage Resolution Partners (MRP) to offer
existing home owners a new mortgage at a value between the city's purchase
price and the current market value. The city and MRP would split the profits
and the home owner would no longer be "underwater." ....To ReadMore....
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