Friday, December 27, 2013

Reverse eminent domain keeping Americans in their homes

This is something to keep an eye on. What is meant by reverse eminent domain? Basically, it's when a city makes a market-value offer on a "toxic" home loan and reissues the debt to the current homeowner at a lower rate of interest.

In 2005, Dubya's Supreme Court gave localities the right to invoke eminent domain -- and evict landowners -- solely for the purpose of local economic development, for example, to let a private developer build a strip mall. Facing a conservative uproar, Dubya limited the SCOTUS ruling with an executive order in 2006. Nevertheless, depending on state law, that SC ruling can be turned against Wall Street banks that are holding millions of underwater and delinquent homes hostage.

Leopold reminds us that there are still 10.8 million U.S. homes underwater, with a total negative equity of $805 billion. This mortgage debt crushes consumer demand, drains tax dollars from cities and states, and holds down a more robust economic recovery. It's in everybody's interest, but especially municipalities', to do something about it.

By Les Leopold
December 15, 2013 | AlterNet

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