Two More Cities Consider Seizing Mortgages

The cities of Sacramento and Elk Grove are the latest municipalities to consider a plan that would seize troubled mortgages using eminent domain and restructure them for homeowners, according to a news report. The plan would adopt a program already under consideration in Southern California that would use private funds to acquire underwater mortgages -- those where the homes wouldn't sell for enough money to pay off the loans. Under the proposal, the condemned loans would be restructured, lowering the amount owed, with the intent of helping the owner keep the property. The proposal is pushed by a San Francisco investment group called Mortgage Resolution Partners that has close ties to former San Francisco Mayor Willie Brown. The plan has been denounced by groups representing the securitization industry, as well as the overseer of mortgage titans Fannie Mae and Freddie Mac. Nevertheless, the idea appears to be gaining traction among certain jurisdictions, politicians and even some celebrities...more