Originally Posted by Independent
The value of the mortgage is the present value of the expected future payments (and that PV will be a little more or less than the outstanding principal, depending on interest rate changes).
If the homeowner is current, why would I assume that those future payments aren't going to be made?
Originally Posted by M Paquette
At which point the homeowner drops the deed and keys on the table in front of the lender on the way out of court.
So then let the homeowner drop their keys and walk out - and then start the multi-month foreclosure proceeding, which is what established foreclosure law is about.
You're asking a large industry to summarily willfully reneg on their contracts solely in order for the local government to share in the profits.
The local community isn't taking an interest in other foreclosed homes to reduce their supply and improve the community, nor is it interested in helping displaced homeowners who lost their homes to line up financing to buy a different home at the current (lower) market price - which would truly help eliminate the supply of vacant homes and stabilize the community.
Is it similar to ED practices to level some homes to build a shopping mall? Well, all I can say is, hopefully those homeowners forced to sell in order to build a SuperWalMart at least received a market price for their homes - they didn't buy their home for $100,000, and had the gov't force them to sell at $50,000, which is what they appear to want to do with a select minority of the mortgages.
And before I say the next part, for the record, I'm not a strong proponent of using ED mainly to satisfy the whims of a local developer and increase tax revenue....but, with this selective mortgage ED seizure, the community is only doing this to increase their revenue, and they're doing it on a selective, 'random' basis. It's not like they can point to the corner of Washington and Carver St, and say "this is a major intersection, and it would somewhat benefit the community to have more competition with more retail choices" (as with Retail Development ED), or point to an entire neighborhood and say "30% of the homes in this subdivision are already vacant and foreclosed on, we need to help stop even more foreclosures and revitalize the neighborhood to avoid suburban blight" - it's purely on a random basis (for those mortgages not involved in gov't guarantees), and solely to increase revenue.