The City of Richmond California has taken a step that will force the Banks to prove their loss — something that most of them can’t do. Richmond has taken final action to seize underwater mortgages whether or not they are declared to be in default. This action will result, one way or the other, in the homeowners getting mortgages that have balances equal to the fair market value proven by the banks, whether or not they are foreclosing on the property. I first proposed this solution 6 years ago, and until now, many cities had considered it but only Richmond, CA has actually done it.
When litigation commences, the Banks will challenge the right of eminent domain, on which they will most likely lose, and then the Banks will be required to prove their loss, something they cannot do because there is no loss. The resulting disclosure of no losses to those who are foreclosing and no loss to those who are collecting will be devastating to the full court press of foreclosures and to the truthfulness of reports of ownership to government agencies initiated by Wall Street entities.
This changes everything since it doesn’t carry the taint of “deadbeat” trying to get out of “legitimate debt”. Instead it offers the market value to the holders of the mortgage. The Banks don’t own the mortgages, used the money of investors (who were the real owners of the loans, if not the note and mortgage), received multiple payments from insurance companies and other third parties and have sold, for 100 cents on the dollar, the loans to the Federal Reserve on the premise that the mortgage Bonds represents ownership of the loans — a premise that can only be true if the loans were properly transferred into the REMIC trusts.
The eminent domain action starts with the premise of a valid note and mortgage. Litigation will expose the defects in both the ownership and the claimed balance due. The fair market value will mostly be considered to be the fair market value of the property. The trading markets might also be used as a reference.
Eminent Domain in litigation will expose the fatal defects in the loans, notes, mortgages and foreclosures. It will show that even the “performing” loans have disputable ownership issues and disputable loan balances after the Banks received, on behalf of the investors, insurance payment, guarantee payments and proceeds of sale from the Federal Reserve.
Filed under: foreclosure