[trapped_in_LA]

This is all about yet another way to stick this mess on to the tax payers and to enrich a few well connected people. Zerohdge has a pretty good write up on this scam:

http://www.zerohedge.com/news/guest-post-eminent-domain-mortgage-heist

The one thing that I’m not sure of is how these cities think that anyone will lend them money for this since they seem to be going bankrupt at an increasing rate. You would have to be stupid beyond belief to invest in municipal bonds in California right now, especially for some harebrained real estate scam.

[Alberta's Child]

Maybe I'm missing something here. If a home with a $300,000 mortgage is only "worth" $200,000 under some kind of objective appraisal, how does a municipal government gain anything by using eminent domain to take possession of the mortgage? They still have a $300,000 liability on their hands, and -- more importantly -- they own a home that may no longer be a ratable property if the municipality is the owner.

If the intent is to deal with all of these underwater mortgages and deteriorating neighborhoods, they'd be better off leaving everything as-is and just taking possession of the homes through a tax lien.

Again -- I may be overlooking something completely on this ... so feel free to flame away!

[Lorianne]

I agree.

But I am still curious to see someplace try this and see the repercussions from this. It’s bound to be a train wreck in ways that we can’t even imagine right now.

For example, the aftermath of the Kelo decision for that particular property is a very good object lesson ... should be brought up more often.

For that reason alone I hope San Bernadino Co. or someother lame-brained entity should go for this.

[Lorianne]

I agree.

But I am still curious to see someplace try this and see the repercussions from this. It’s bound to be a train wreck in ways that we can’t even imagine right now.

For example, the aftermath of the Kelo decision for that particular property is a very good object lesson ... should be brought up more often.

For that reason alone I hope San Bernadino Co. or someother lame-brained entity should go for this.