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Another Way To Lose Your House

Last week the White House issued an executive order [1]:

Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq

…all property and interests in property of the following persons, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in…

When I came across this order, I wondered what would the US government do with the property? If a consumer bought a property that was formerly owned by someone that the government deemed a threat to national security, would anyone really want to live in it if they were fully informed about the prior owner? Does the buyer second guess the government to determine whether the threat is real and its worth the risk to take possession?

If this prior ownership was clearly disclosed at sale, presumeably in an auction, I would think this stigma could have an adverse impact on market value. However, on a more macro level, Dan Green debunked the relationship between recent terrorist threats [2] and mortgage rates over at The Mortgage Reports.