On Thursday, September 6th, Berkeley Law Adjunct Professor Bill Falik will give a presentation on his work with Mortgage Resolution Partners (MRP), an organization advocating and seeking to fund local governments’ use of eminent domain to purchase underwater mortgages. The presentation is titled: Saving Homes, Saving Cities: Fixing the Mortgage Crisis Locally. The event will be held in Room 110 of UC Berkeley School of Law at 12:45 and is sponsored by the Berkeley Center for Law, Business and the Economy and the Berkeley Business Law Journal. CLE credit is available and lunch will be provided.
Various cities across the country are considering the use of eminent domain to purchase underwater mortgages. Under the proposal, cities would use eminent domain to condemn the underwater mortgages (not the underlying property), at which point the city would purchase the loans for market value and refinance the loans to the homeowner at a principle balance equal to the current market value of the home.
This proposal has spawned predictions of dire consequences from members of the mortgage finance industry. Critics of the proposal argue that it is unconstitutional and would harm the mortgage market. Criticism has been so fierce as to prompt Lt. Governor of California Gavin Newsom to call on the Securities Industry and Financial Markets Association to stop threatening local officials in San Bernardino, a city considering the proposal.
Adjunct Professor Falik’s presentation will focus on MRP’s primary goal—to reduce the devastating health, safety, and welfare costs of underwater mortgages, foreclosures, and abandoned properties, leading to crime and blight, as well as depressed economic activity. He will argue that principal reduction is the most effective way to break the mortgage logjam that evicts families, decimates communities, paralyzes the banking system, and holds back economic recovery.
If you would like to attend the presentation, please RSVP to BCLBE@law.berkeley.edu