The new eminent domain investors could make huge profits

Aug 192012

Please note this program would refinance out of private mortgages and into mortgages that federally guaranteed. If you want to fix housing then strategic default is best.

This program is a vampire program because it sucks the life out of old mortgages for the benefit of brand new mortgages.

Seizing Mortgages Could Yield Big Returns

By Al Yoon | The Wall Street Journal

Tapping the power of eminent domain to repair underwater mortgages could generate investor returns of up to 30% and billions of dollars in fees for bankers behind the proposal, according to people with knowledge of the plan.

The use of eminent domain to seize and restructure mortgages is an idea that has enraged bondholders who worry they will be forced to sell mortgages from their securities to municipal governments at a steep discount. But the proposal, being pitched to municipalities by advisory firm Mortgage Resolution Partners, has piqued the interest of San Bernardino County and two other California municipalities where home-value declines of 50% or more have crippled local economies.

Despite the controversy, some potential investors in Mortgage Resolution’s plan are stepping forward. “We think the program has legs and a fairly strong legal justification” to seize mortgages with eminent domain, said Tom Capasse, co-head of Waterfall Asset Management, which said it is considering investing in the plan.

Under the plan, loans that are current and underwater—that is, their balances are greater than the home’s value—would be seized from mortgage bonds at prices up to 25% below appraised home values, then refinanced through a federal loan program.

It isn’t clear whether the eminent domain plan will get off the ground. The proposal has disturbed financial trade groups who say it violates mortgage contracts and isn’t a public use as required under eminent domain. The groups assert that Mortgage Resolution Partners will encourage municipalities to deeply undercut market value when buying the loans, doling out losses to mortgage bondholders and handing big gains to itself and its investors.

Wouldn't you be embarrassed to overpay by $100,000? Only fools buy houses without knowing neighborhood values. Don't be a fool. Don't suffer the pain of an underwater mortgage. The surest way to lose your house is to overpay for it. Our reports identify overvalued and undervalued neighborhoods. Use it to broaden or narrow your search area. Savvy buyers work with us to find bargains. We've saved thousands from financial ruin. Let us save you too. If you want peace of mind while shopping for your next home, sign up for our monthly market newsletter.

We're sorry, but it seems that we're having some problems loading MLS # S706782 from our database. Please check back soon.

Proprietary OC Housing News home purchase analysis

9300 HEATHER Ave Fountain Valley, CA 92708

$520,000 …….. Asking Price
$595,000 ………. Purchase Price
8/26/2004 ………. Purchase Date

($75,000) ………. Gross Gain (Loss)
($47,600) ………… Commissions and Costs at 8%
============================================
($122,600) ………. Net Gain (Loss)
============================================
-12.6% ………. Gross Percent Change
-20.6% ………. Net Percent Change
-1.7% ………… Annual Appreciation

Cost of Home Ownership
——————————————————————————
$520,000 …….. Asking Price
$104,000 ………… 20% Down Conventional
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$416,000 …….. Mortgage
$96,598 ………. Income Requirement

$1,915 ………… Monthly Mortgage Payment
$451 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$130 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$2,495 ………. Monthly Cash Outlays

($303) ………. Tax Savings
($632) ………. Equity Hidden in Payment
$127 ………….. Lost Income to Down Payment
$150 ………….. Maintenance and Replacement Reserves
============================================
$1,837 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$6,700 ………… Furnishing and Move In at 1% + $1,500
$6,700 ………… Closing Costs at 1% + $1,500
$4,160 ………… Interest Points
$104,000 ………… Down Payment
============================================
$121,560 ………. Total Cash Costs
$28,100 ………. Emergency Cash Reserves
============================================
$149,660 ………. Total Savings Needed

The property above is available for sale on the MLS.

Contact us for a comparative market analysis, a cost of ownership analysis, or information on how you can make an offer today!

Cost of Ownership Analysis

Are you ready to make an offer, but you are worried the cost of ownership is really more than you can afford? Don't make a mistake that might cost you the family home, your life savings, and your good credit! Get the advice of a seasoned professional. Contact us at info@ochousingnews.com today! We produce detailed reports showing the cost of ownership based on the most likely transaction price and current financing terms. You will know how much you will spend each month in out-of-pocket expenditures and the true monthly cost of ownership factoring in tax deductions, loan amortization, and opportunity costs on your down payment. In addition, we show you how this cost compares to a rental of equal quality to make sure buying is the right decision for your situation. An OC Housing News Cost of Ownership Analysis will calm your worries and give you peace-of-mind. Let us show you the way! Reports are available for properties in the Southern California MLS coverage area, and are generally delivered within 24-72 hours. If you wish to receive multiple properties, please contact us at info@ochousingnews.com, and we will prepare the reports for you.

OC Housing News FREE Guides!

Nearby Foreclosures

Gain a competitive advantage over other buyers. By locating distressed properties -- before they hit the MLS -- you can discover where tomorrow's REOs and short sales will appear. Most of these properties are not listed on the MLS, but they will be soon. Research properties in advance and get a jump on your competition. Don't miss out on another deal because you couldn't act quickly. Use this tool to your advantage! The red properties are already bank owned. As soon as REO asset managers prepare them for sale, they will be on the MLS. Get ready! The green and blue properties have owners who are not paying their mortgages. They may be offered as short sales, or they may go through foreclosure and become REO. Either way, they will also likely be available on the MLS soon. Find your next home! Be prepared to offer on these properties by researching them in advance or risk losing out to buyers who are have done their homework. Start your research today! To find distressed properties, enter your desired location and press search. Scroll through list by pressing "next."

Comparative Market Analysis

Are you ready to make an offer, but you are worried you will either (1) underbid and miss the property or (2) overbid and pay too much? Don't make a mistake and miss your dream home, or worse yet, overpay for it! Get the advice of a seasoned professional. Contact us at info@ochousingnews.com today! Are you thinking about selling, but you are worried you will either (1) overprice and fail to sell or (2) underprice and leave money at the negotiating table? We are the experts in real estate valuation. Work with us to set the right prices to sell your property quickly for the largest amount possible. Let us show you what your property is worth today! An OC Housing News Comparative Market Analysis will calm your worries and give you peace-of-mind. See for yourself right now! Reports are available for properties in the Southern California MLS coverage area, and are generally delivered within 24-72 hours. If you wish to receive multiple properties, please contact us at info@ochousingnews.com, and we will prepare the reports for you.

	$689,900 16537 ELM		0.07 miles 4 bd / 3 ba 2,055 Sq. Ft.
	$699,000 16583 TEAK Cir		0.17 miles 5 bd / 3 ba 2,145 Sq. Ft.
	$475,000 16138 CHALLIS		0.35 miles 4 bd / 2.75 ba 1,928 Sq. Ft.
	$795,000 9526 Shamrock Ave		0.44 miles 4 bd / 2 ba 1,808 Sq. Ft.
	$485,000 9271 PARLIAMENT Ave		0.53 miles 4 bd / 2 ba 1,796 Sq. Ft.
	$549,000 16260 South VENUS Dr		0.56 miles 3 bd / 2.25 ba 2,020 Sq. Ft.
	$569,000 17242 SANTA BARBARA St		0.83 miles 4 bd / 3 ba 1,790 Sq. Ft.
	$435,000 16972 BRESSEL Ln		0.84 miles 2 bd / 1.75 ba 1,627 Sq. Ft.
	$495,000 15611 BEGONIA St		0.9 miles 4 bd / 2 ba 1,635 Sq. Ft.
	$449,900 8980 LA DONA Ct		1.05 miles 3 bd / 2 ba 1,534 Sq. Ft.