The MRP plan is nothing more than a bribe to local municipalities to use their power of eminent domain to seize assets for less than they are worth and split the profits. Your constituents may not care about that. What they should care about is that the program is effectively designed to not help the vast, vast majority of homeowners. In order to sell the mortgages seized by the MRP scheme only a few loans will qualify. Mostly those that have been making payments regularly for some time. It will chill lending to those municipalities and not just in mortgages. The recent failure of Richmond to sell its municipal bonds is an acute example. If your job is to choose which municipal bonds in which to invest, how could one possibly choose bonds from a municipality where the mayor believes it is ok to seize the debt from the creditor and effectively destroy it? All other things equal, it is an incredibly obvious and prudent decision to choose to invest in debt from another geographic area. This isn’t redlining. Obviously, this logic works for any type of debt. Pursuit of these programs is reckless and risks harming any area that pursues it by rendering that area riskier than others from a lending perspective.
This feedback was sent by:David Gussmann from Scarsdale, NY
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