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Paying Paul And Robbing No One: An Eminent Domain Solution For Underwater Mortgage Debt, Robert C. Hockett
Paying Paul And Robbing No One: An Eminent Domain Solution For Underwater Mortgage Debt, Robert C. Hockett
Cornell Law Faculty Publications
In the view of many analysts, the best way to assist “underwater” homeowners — those who owe more on their mortgages than their houses are worth — is to reduce the principal on their home loans. Yet in the case of privately securitized mortgages, such write-downs are almost impossible to carry out, since loan modifications on the scale necessitated by the housing market crash would require collective action by a multitude of geographically dispersed security holders. The solution, this study suggests, is for state and municipal governments to use their eminent domain powers to buy up and restructure underwater mortgages, …
A Fixer-Upper For Finance, Robert C. Hockett
A Fixer-Upper For Finance, Robert C. Hockett
Cornell Law Faculty Publications
Three facts bear notice in connection with our current financial troubles. The first is that the First World War, before the Second began, was known as "the Great War." The second is that the global Depression that struck between those two wars, which for now we can still label "Great," commenced with the burst of a multiyear real estate price bubble prior to the 1929 stock market crash. The third is that the U.S. accordingly addressed that depression through mutually reinforcing new regimes not only of financial regulation, but also of home mortgage finance - the very reforms that brought …