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We Must Save You From Yourself

June 16, 2013

To be clear, your government doesn’t think you should be responsible for your own choices.  Well, unless they’re ones they approve of in the first place.

I feel for people who have lost value on their house, which is likely one of their most important investments in their portfolio.  However, values are flexible, and many of the people who are “underwater” can likely ride out a drop by continuing to make payments.  If the payments were unaffordable in the first place, why did someone take a mortgage?  I’m sure I could pull in lots of arguments around how I don’t understand the realities of life… okay, I get it.  People still need to make choices and live with them, and to fight back when life intervenes.

Or, they could just have the government rescue them.

Richmond remains among the Bay Area cities most devastated by the foreclosure crisis; almost half of its mortgaged homes have loans exceeding their value, according to (Zillow has a nifty interactive heat map where you can look up the percentage of underwater homes in your own ZIP code, by the way).

Now the city hopes to pioneer a drastic new plan: use the power of eminent domain to seize some of those mortgages from the private investors who hold them in mortgage-backed securities, then slash tens of thousands of dollars off the principal, making them affordable.

Saturday’s meeting, organized by the Alliance of Californians for Community Empowerment, captured a community that’s ready to fight back against Wall Street interests. But it’s likely to be an uphill battle in which banks and other entities will shower the area with commercials warning of a doomsday impact if the controversial plan goes through.

The, “Alliance of Californians for Community Empowerment?”  Why does that seem like an organization that was founded in a dorm room when the first members didn’t make their chosen Greek organizations?

And, “fight back against Wall Street interests?”  So some Wall Street stock broker flew to Richmond and forced these people to take a mortgage?  Were banks chasing people down the street forcing them to refinance a decent mortgage?

Okay, whatever.  If you want to ensure that a bank never offers a mortgage again, go ahead and seize its existing loan and then go back asking it to finance again.  Sure, the ACCE might become its own bank offering loans backed by some other entity (I’m just projecting), and then what happens when things start to go bad there?

Life is full of choices, and we have to live with the ones we make.

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