Release Date: July 30, 2013
Contact: Andrew DeSouza, 202.962.7390, firstname.lastname@example.org
Katrina Cavalli, 212.313.1181, email@example.com
SIFMA Statement on City of Richmond’s Threats to Use Eminent Domain
Washington, D.C., July 30, 2013—SIFMA today released the following statements from former Senator Judd Gregg, CEO, SIFMA and Tim Cameron, managing director and head of SIFMA’s Asset Management Group after the City of Richmond, California sent letters to 32 trustees and servicers notifying them of offers to purchase loans and that they may use eminent domain to seize mortgages for modification.
Former Senator Judd Gregg, SIFMA CEO:
“The action being taken by the city of Richmond will hurt many more homeowners both within the city and around the country than it is alleged to help. It will raise borrowing costs for numerous home buyers and could end up restricting credit availability. The plan will also harm the savings of everyday Americans around the country and have a negative impact on already stressed pension funds and the value of their investments.
“The practical effect of this proposal will be that individual investors, who put their money into pension funds and other investment vehicles, making mortgage money available to homebuyers, will see their assets and savings arbitrarily, and we believe unconstitutionally, taken. This will not help expand mortgage credit availability in this country.
“Programs exist, though they are often under utilized, that can better help homeowners in a more positive way than using eminent domain.”
Tim Cameron, Managing Director, Head of SIFMA AMG:
“We strongly oppose the use of eminent domain to seize mortgage loans, and believe it is a serious mistake to pursue a plan that would harm investors, constrict credit for borrowers and depress housing prices just as the housing recovery is gaining steam.
“Asset managers have a fiduciary duty to protect their clients, who are the investors—the teachers, firefighters, policemen and other middle-class American savers—who put their money into 401(k)s, pension plans, IRAs and other savings vehicles that invest in mortgage-backed securities. The eminent domain proposal targets MBS and tears mortgage contracts apart, creating a loss for investors and significantly undermining the trust and confidence investors and savers have traditionally had in America’s capital markets.”
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.