California cities propose use of eminent domain for underwater mortgages
A proposal by private entities and investors is being considered in the cities
of San Bernardino, Fontana, and Ontario to use eminent domain to seize mortgage
loans that are underwater and refinance them at the current mortgage principal.
The proposal, which
would be financed by private entities and investors, is only for mortgages
where homeowners are current on their mortgage and for loans that are currently
owned by private label securities. Loans owned by Fannie Mae, Freddie
Mac, Veterans Administration, or portfolio loans would not be eligible.
Additionally, homeowners whose mortgages are delinquent or in the process of
being foreclosed on will not benefit from the proposed plan.
C.A.R. is opposed to
the use of eminent domain for this purpose, as it fails to meet the
requirements necessary for a government to use eminent domain to seize