Richmond Mayor committed to eminent domain fight
California city pushes forward with eminent domain program
Monday Morning Cup of Coffee is a quick look at the news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.
Richmond, Calif. Mayor Gayle McLaughlin is not worried about moving ahead with the city’s plan to forcibly purchase mortgages from bondholders through the city’s eminent domain program, the Wall Street Journal noted.
McLaughlin said she is not deferred from the eminent domain program despite a court challenge and the possibility of additional action by a federal regulator.
"We feel strongly that we’re on legal ground," she said in an interview with Developments. "We’re not afraid of going into the courtroom. We believe our legal reasoning will prevail."
However, bondholders don’t like the eminent domain plan because they’re concerned that they’ll be shortchanged when cities begin to purchase the loans.
Meanwhile, President Barack Obama’s administration overstated statistics from a year-long mortgage fraud initiative, including the amount of victims, losses suffered and number of individuals criminally charged, according to a Federal Bureau of Investigation memo.
The FBI asked members of the administration’s Mortgage Fraud Working Group to correct and update any public materials related to results released in October of a law enforcement initiative targeting homeowner fraud schemes, Bloomberg claimed in an article.
"This targeted approach resulted in the successful filing of many criminal and civil cases around the country, but regrettably, the statistics reported in October included cases that fell outside the specific parameters of the initiative," the FBI, which co-chairs the mortgage group, said in the memo.
While it’s hard to picture Detroit’s bankruptcy filing as anything but another blow to municipal bond insurers, the city’s fiscal upheaval might actually provide the marketing spark needed to revive bond issuers, Reuters writes.
Detroit’s filing may serve as a stark reminder of the wisdom of buying insurance. Simply put, insurers’ payment guarantees make their bonds more attractive to investors.
"Investors are going to see the benefit of insurance in action more and more," said Alan Schankel, head of fixed income research and strategy at Janney Capital Markets. "I think this is net-net a positive marketing story for bond insurance."
Although it’s a good time to buy in terms of house prices and relatively low mortgage rates, if potential homeowners can find a good house at a good price and a loan at a great rate, seize the opportunity.
However, the inventory of available homes for sale continues to shrivel up for various reasons, according to the LA Times.
In particular, buyers are going head-to-head with investors who are willing to dish out the cash and turn properties into rentals. Additionally, homebuilders are constraining sales, to take advantage of rising prices.
The Federal Deposit Insurance Corp. shut down one bank at the end of last week.
Bank of Wausau, located in Wausau, WI, was closed by the Wisconsin Department of Financial Institutions, which named the FDIC as the receiver. To ensure the depositors have a place to access their accounts, the FDIC entered into an agreement with Nicolet National Bank in Green bay, Wis.
The sole branch will reopened on Aug. 10 as a branch of Nicolet National Bank during its normal business hours.
Bank of Wausau had $43.6 million in total assets and $40.7 million in total deposits.
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