Testimony of Robert Hockett: Financial Services Panel Series, the Honorable Maxine Waters (CA-35) Presenting: The Housing Crisis and Policy Solutions: Should Eminent Domain Be Used to Save Underwater Homeowners?

Abstract

This written testimony accompanied Professor Hockett's oral testimony, given 11 September 2012, before a House of Representatives panel convened by Rep. Maxine Waters, on the necessity of municipalities' employing their eminent domain authority to purchase and write-down principal on deeply underwater private label securitized (PLS) mortgage loans. Professor Hockett argues that familiar market impediments prevent voluntary write-downs of such loans even when such write-downs are as creditor- as they are debtor-friendly. Pursuit of his eminent domain approach to the otherwise insoluble, still ongoing mortgage debt deflation, Professor Hockett concludes, will be 'win-win' for all interested parties.

Keywords: Banks, Condemnation, Crisis, Debt, Debt Deflation, Eminent Domain, Financial Crisis, Foreclosure, Homes, Housing, Housing Crisis, Loans, Local Government, Local Government Law, Mortgages, Mortgage Crisis, Mortgage Debt, Mortgage Foreclosure, Municipal Government, Private Label Securitization, PLS