It doesn’t say they are deadbeat.
What it says is that the loans are underwater.
And what the city is proposing is to take these loans from the banks, and pay the banks LESS than what the loans are for, and LESS than what the houses are worth.
So essentially, they are proposing to steal the right to foreclose from the banks, for less money than what the banks may have gotten if they foreclosed and sold the property.
Once the city does this, they will have performing mortgages that will, over time, pay the city back more in principle than the city put in. It could be a money-maker. And it is easy to make money if you can force someone to sell you something for less than it’s value.
What i don’t understand is how they would get away with this, because even in the dreadful Supreme Court Kelo case, the SC still upheld the rule that the government had to pay the full market value for the property.
There is little reason to believe the mortgages would suddenly become performing. Many people there are unemployed. And the banks have been rewriting those loans they think could be transformed Into a paying status. With not so great results a lot of the time. No. Most of the defaulted loa s will stay that way in Richmond Or many if them anyway. But you’re right that the legal costs a d settlement costs will far exceed anything Richmond can pay. This whole crazy scheme has been lobbied by an outfit that wants to do the work fir the city. But the company won’t be paying fir the losses.
There is little reason to believe the mortgages would suddenly become performing. Many people there are unemployed. And the banks have been rewriting those loans they think could be transformed Into a paying status. With not so great results a lot of the time. No. Most of the defaulted loa s will stay that way in Richmond Or many if them anyway. But you’re right that the legal costs a d settlement costs will far exceed anything Richmond can pay. This whole crazy scheme has been lobbied by an outfit that wants to do the work fir the city. But the company won’t be paying fir the losses.