San Bernardino, Calif., isbankrupt, under criminal investigation, and now county officials are considering a plan to use eminent domain powers to “seize and refinance” underwater mortgages, according to theWashington Free Beacon’s Andrew Stiles.
Put forward by investors with ties to the Democratic Party, the proposal has been met with opposition by critics who claim it is both a violation of
property rights and “an exercise in political cronyism.”
property rights and “an exercise in political cronyism.”
What, exactly, is involved in the plan? Stiles explains:
The county, along with the cities of Ontario and Fontana, has created a joint authority to consider a plan to restructure mortgages for certain borrowers who are “underwater,” meaning they owe more than their homes are worth. Officials estimate that as many as 100,000 mortgages in San Bernardino County are underwater.The new authority would apply eminent domain power, which allows governments to forcibly acquire private property for public benefit. However, rather than seizing the physical properties in this case, the authority effectively would be purchasing the mortgages owed by the property owners, with the aim of restructuring them and selling them to investors who could then turn a profit by flipping the homes.
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