Sunday, September 1, 2013

Homes for Banks, Not for People

Picture this: a town in Northern California decides it's their prerogative to use the power of eminent domain to seize foreclosed homes from the bank and sell them back to the people who lived in them at a fair value.

This is what the (female, progressive) Mayor and council of little Richmond California did (note they decided it was their right to do so; they have not yet voted to go through with the scheme), and now they are reaping the wrath of  big banks, who are threatening their ability to sell municipal bonds and bring suit against the town for its audacity.

Fantasy scene in some anonymous boardroom, as the papers are signed, assuring an upstart town with a disproportionate number of low income minorities, won't get away with their dastardly plan to keep folks in their own homes: "Whoever heard of eminent domain being used to actually help people?" said mega bank (insert name here) head James McGreedy. "We expect them to use their powers to get rid of poor people and let business have free reign, not the other way around."  Heads nod all around.

Back to real life: Mayor Gayle McLaughlin leads a protest march on Wells Fargo headquarters in San Francisco to demand its end its extortion of the beleaguered town.
And extortion is what it is. Banks and their investors hold all the cards in this game, and they want to be sure no one else gets to play. Homes for banks, not for people.  Profits ubeur alles.

Interestingly enough this is not a radical scheme dreamed up by this single municipality, but one that is time honored, and was endorsed by the Supreme Court in 1935, when, while overturning a law geared at modifying the loans of farmers hurt by the Depression, Justice Brandeis stated:

"If the public interest requires, and permits, the taking of property of individual mortgagees in order to relieve the necessities of individual mortgagors, resort must be had to proceedings by eminent domain.” See Bloomberg online for August 17, 2013.

Good luck Mayor McLaughlin and Richmond.