Brockton eminent domain group has packed to-do list
BROCKTON — The city’s eminent domain working group has a packed agenda as it considers a strategy to use government authority to take mortgage notes from national banks to help city homeowners.
The group, led by Councilor-at-large Jass Stewart, met Wednesday for the first of multiple meetings to consider the eminent domain idea, which would put Brockton at the forefront of trying to combat the effect of the national foreclosure crisis.
Using eminent domain to seize mortgage notes, which contractually bind residents to pay back homeowner loans, would be a novel but legal use of government authority, according to group members.
“We all think of eminent domain as grabbing another person’s property to expand a road,” said Grace Ross, a group member and the coordinator of Massachusetts Alliance Against Predatory Lending.
Ideally, the city would use its power of eminent domain to take the mortgage note of a resident in need of refinancing from a national bank and transfer it to a lender interested in helping the resident refinance the loan, preventing possible foreclosure. The effort could potentially improve the housing market in a city that routinely leads the state in having the most distressed properties per capita.
But while the group agrees the new way of using eminent domain would stand up to legal challenges, it has to consider multiple aspects of how to put the strategy into place, including:
Choosing which mortgages to target
Choosing which homeowners should be helped
Finding financing for compensating the banks holding the mortgages
Finding homeowners eligible for state and national refinancing programs
Deciding how much to compensate the national banks that hold the mortgages, which in many cases are more than the house is worth
“Either the law is going to be on our side or it’s not,” Ross said of the strategy. “The argument comes over valid fair market value for a mortgage.”
Ross prepared a working paper for the group’s first meeting and estimated that the city could target about 2,300 mortgages that are tied to national banks that packaged the mortgage debt in complicated financial deals.
Councilor-at-large Thomas Brophy, a group member, staked out opposition to any strategy that would cost the city money.
“If it’s going to cost the city one dime, I’m not going to support it,” Brophy said.
The group also talked about the potential for the banking community to oppose the effort, as has happened in other communities considering the same idea. Stewart would also like to have a banking community member as part of the group.
Mayoral candidate Ron Matta, in attendance at the meeting, expressed his opposition to the idea, pointing to potential legal and lending problems. “If we set the precedent of employing eminent domain against lenders in the city of Brockton, who will lend to us in the future?” Matta said in a statement he gave to The Enterprise.
The group plans to produce both a strategy and a dissenting opinion for consideration by May.
The group is scheduled to meet again March 7 to hear from multiple lawyers about the strategy.
READ MORE about this issue.
The city’s eminent domain working group has a packed agenda as it considers a strategy to use government authority to take mortgage notes from national banks to help city homeowners.
The group, led by Councilor-at-large Jass Stewart, met Wednesday for the first of multiple meetings to consider the eminent domain idea, which would put Brockton at the forefront of trying to combat the effect of the national foreclosure crisis.
Using eminent domain to seize mortgage notes, which contractually bind residents to pay back homeowner loans, would be a novel but legal use of government authority, according to group members.
“We all think of eminent domain as grabbing another person’s property to expand a road,” said Grace Ross, a group member and the coordinator of Massachusetts Alliance Against Predatory Lending.
Ideally, the city would use its power of eminent domain to take the mortgage note of a resident in need of refinancing from a national bank and transfer it to a lender interested in helping the resident refinance the loan, preventing possible foreclosure. The effort could potentially improve the housing market in a city that routinely leads the state in having the most distressed properties per capita.
But while the group agrees the new way of using eminent domain would stand up to legal challenges, it has to consider multiple aspects of how to put the strategy into place, including:
Choosing which mortgages to target
Choosing which homeowners should be helped
Finding financing for compensating the banks holding the mortgages
Finding homeowners eligible for state and national refinancing programs
Deciding how much to compensate the national banks that hold the mortgages, which in many cases are more than the house is worth
“Either the law is going to be on our side or it’s not,” Ross said of the strategy. “The argument comes over valid fair market value for a mortgage.”
Ross prepared a working paper for the group’s first meeting and estimated that the city could target about 2,300 mortgages that are tied to national banks that packaged the mortgage debt in complicated financial deals.
Councilor-at-large Thomas Brophy, a group member, staked out opposition to any strategy that would cost the city money.
“If it’s going to cost the city one dime, I’m not going to support it,” Brophy said.
The group also talked about the potential for the banking community to oppose the effort, as has happened in other communities considering the same idea. Stewart would also like to have a banking community member as part of the group.
Mayoral candidate Ron Matta, in attendance at the meeting, expressed his opposition to the idea, pointing to potential legal and lending problems. “If we set the precedent of employing eminent domain against lenders in the city of Brockton, who will lend to us in the future?” Matta said in a statement he gave to The Enterprise.
The group plans to produce both a strategy and a dissenting opinion for consideration by May.
The group is scheduled to meet again March 7 to hear from multiple lawyers about the strategy.
READ MORE about this issue.
Read more: http://www.enterprisenews.com/topstories/x1893338324/Brockton-eminent-domain-group-has-packed-to-do-list#ixzz2MUK2baBu
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