“Banks will be less willing to lend to Californians, which will drive down property values.”

Wait. I thought that was what was SUPPOSED TO HAPPEN. I thought that the whole problem was banks being too willing to lend, causing inflation of property values!

Then I should be able to renegotiate that contract to a lower interest rate and a new amortization term with the property as collateral, right?

Oh wait, no I can’t, because the “market value” of the property is less than the amount owed on the loan? Welp.

The Banks hold a current valid contract. I would argue that the value of the contract is it’s face value. If the City wants to seize the contract, they should pay the balance owed.

The other argument is that Eminent Domain has historically been used to secure property for roads, parks, etc. Even though in the past few years, it has been abused by seizing property to be used for shopping malls and apartment complexes, it has been seized to build something new. This novel use doesn’t even seize the property, it seizes the business contract. It doesn’t rebuild any thing. The same people who live in the houses now will continue to live in the homes. It only benefits them and the financiers who dreamed up this abuse.

The banks won’t sit back and let this happen. This will end up in the Supreme Court. I hope the cities have deep enough pockets to outspend the banks lawyers.