City Moving Forward: Despite national controversy surrounding the issue of using eminent domain to stop foreclosures, the city of Richmond, Calif., will become the first to implement the practice.
The city plans to use eminent domain to buy underwater mortgages and reduce home owner debt by refinancing the loans. The intention is to keep struggling home owners in their homes.
About two dozen local and state governments — including Newark, N.J., Seattle, and several other cities in California — have been considering similar uses of eminent domain.
But strong opposition has kept other cities from moving forward with such a plan. Lawmakers, banks, and members of the real estate industry — including the National Association of REALTORS® — have argued against using eminent domain in such a way, calling it unconstitutional and unprecedented. “The banks have warned that such a move will bring down a hail of lawsuits and all but halt mortgage lending in any city with the temerity to try it,” See Report....
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