Outraged Bondholders Sue "Brazen" Eminently Domaining California Town

While the likes of PIMCO, BlackRock, DoubleLine, and Wells Fargo are major RMBS holders, their reasons for seeking a court order to block Richmond, California's Eminent Domain seizure of mortgages are applicable (and should be worrisome) for all US citizens. As we have noted previously, the asset managers warn that the Mortgage Resolution Partners actions will "seriously harm average Americans, including pension members, other retirees and individual savers through a brazen scheme to abuse government powers for its own profit." While the Richmond Mayor stands by her decision, the investors argue that this plan is unconstitutional and discriminatory - sounds just about right in our new normal.

Of course, with President Obama's new 'better bargain for the middle class' and his partnership with Zillow, nothing would surprise us that this becomes the new normal wealth transfer mechanism... but once again few will have considered the unintended consequences...

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