'We Don't Follow, We Lead': How New York City Will Save Mortgage Loans by Condemning Them

Abstract

This brief invited essay lays out in summary form the eminent domain plan for securitized underwater mortgage loans that the author has been advocating and helping to implement for some years now. It does so with particular attention in this case to New York City, which is now actively considering the plan. The essay's first part addresses the plan's necessity. Its second part lays out the plan's basic mechanics. The third part then systematically addresses and dispatches the battery of remarkably weak legal and policy arguments commonly proffered by opponents of the plan.

Keywords: Bubble, Credit, Credit Bubble, Creditor, Crisis, Debt, Debt Deflation, Debtor, Default, Deflation, Eminent Domain, Loans, MBS, Mortgages, Mortgage Loans, Negative Equity, Underwater Loans, Underwater Mortgages, Private Label Securitization, PLS, Securitization, Securitized Mortgages