Dwight Merriam, familiar to our readers for the items of interest he frequently forwards, as a co-author of a
recent brief in the New York rent control case, chapter author in
the seminal eminent domain treatise Nichols on Eminent Domain, for being the editor of the ABA's annual "Cutting Edge" land use books, the author of "The Complete Guide to Zoning" (which could be our favorite book on the subject), and the moderator of perhaps the most well-attended legal teleconferences on the planet (we understand this recent example had over 800 participants), has authored "Eminent Domain for Underwater Mortgages: A Cure Worse Than the Disease?," a piece for The Abstract, the magazine of the American College of Mortgage Attorneys.
It's a good quick summary of the facts in the case of the plan for the city of Richmond, California to take underwater mortgages (a plan which the city recently doubled down on). We've hit this topic before (most recently, our Damon Key colleague Bethany Ace summarized the federal lawsuits here).
Dwight's conclusion:
Look, bottom line, Lindsay Lohan has a greater chance of staying out of trouble than the city of Richmond. On top of the legal issues, all the heavy-duty lawyering adds great transaction costs, and the California housing market is on fire, up 28% year-over-year. And listing prices are up 40% year-over-year in Richmond. "Distressed properties" in Richmond -- those that are bank-owned, REO, in foreclosure or short sales -- are down to 11% versus 23% a year ago. Mayor McLaughlin is looking more and more like an ER doctor trying to give CPR to a patient leaving the hospital for home. The problem will be over long before the lawyers and judges are done with it.
Well said, Dwight. More here on the issue, in this report from NPR.
"Eminent Domain for Underwater Mortgages: A Cure Worse Than the Disease," Dwight H. Merriam, The Abstract (...
