Imagine this, a responsible Hollywood celebrity who is on the proactive solution side of the nationwide foreclosure epidemic, rather than squandering millions and ending up in a distressed real estate situation.
Our “Celebrity Foreclosures” section is loaded with athletes and other high-profile types who have fallen on hard financial times, but John Cusack is apparently on the opposite side of the epidemic, using his prestige to try and help find a creative solution that short circuits the process, as well as gets his local market in Chicago, Ill., along with the struggling homeowners in it, on the road to recovery faster.
The “Better Off Dead” star, who has appeared in more than 50 feature films throughout his successful acting career, appeared at a recent Chicago City Hall meeting to show his support for using the condemnation power of the “Windy City” government to stem the foreclosure crisis through the use of eminent domain.
“It’s an interesting idea to help keep people in their homes,” Cusack told the Chicago Sun-Times. “If something isn’t done about the foreclosure problem, there’s an increased danger to our city. Property values will come down. People will continue to get thrown out of their homes. It may be imperfect, but it’s an intriguing idea that worth considering.”
Eminent domain is an extremely controversial foreclosure solution. It’s a legal instrument typically, and rarely, used in areas of blight/total disrepair or to satisfy a greater community need. In this case, the local government would seize homes with underwater mortgages — those that have higher balances than their actual current market values — and sell them to investors for discounted prices. The reduced, or “written down,” mortgages would then be offered back to the struggling homeowners.
It’s a process that essentially eliminates the often time-consuming, and overall unsuccessful, process of individual lenders attempting to reduce mortgage principals and agreeing to more favorable terms that keep families in their homes longer and/or indefinitely.
As mentioned, it has it’s many critics, including Chicago’s own Mayor, Rahm Emanuel, who doesn’t think “it’s the power of the city” to solve a nationwide housing crisis. Similar push-back on the eminent domain issue in San Bernardino, Calif., which is where this non-traditional idea was hatched, is also making headlines.